Debt Consolidation with Cash-Out RefinancingBy Karen Lawson
Loan Page Columnist
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When the media mentions the national debt, does it remind you of your own situation? On the average, Americans are carrying $8400 in credit card debt. This amount does not include car payments or other installment loans.
Going Up: The Cost of Consumer DebtHigh interest rates, additional fees and charges, and increased minimum payments contribute to the difficulty of paying off high credit card balances. If you are a homeowner, a cash-out refinance of your mortgage may be the tool you need to fix your finances!
Fixing Your Finances and Remodeling Your BudgetRefinancing your mortgage can provide a low cost method of debt consolidation. Cash-out refinancing can be used for many reasons, but if used wisely, it's a great way to pay off consumer debt at much lower interest rates.
The 1, 2, 3's of Qualifying for a Cash-out RefinanceA cash-out refinance is a mortgage loan that will replace your current mortgage, and supply additional cash to pay off consumer debt. Qualifying for a refinance of your mortgage largely depends on three factors:
Mortgage lenders use these factors in determining how much you can afford to borrow. If you have little equity and a high debt to income ratio, you may be charged a higher interest rate, or additional fees to refinance your mortgage. It's important to shop around for cash-out refinancing options. The relief of paying off high interest consumer debt with a much lower rate cash-out refinance may be well worth it.
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About the Author
Karen Lawson is a freelance writer with fifteen years of experience in mortgage lending. She earned an MA degree in English from the University of Nevada, Reno.
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