You can pay off your high-interest credit card debt with a loan that is secured by your home. With the equity in your home as security, you can get some of the best rates. You can choose the terms that work best for your budget. So you can either lengthen the time to pay less or shorten it to get out of debt faster.
Look at what you owe and what you own.
Before you start a cash-out refinance, add up all of your short-term debt and compare it to the value of your home. Also, keep in mind that your equity is based on the assessed value of your home, not how much you paid for it. Make a list of the interest rates on your credit cards and your current mortgage so you can figure out how much you could save if you refinanced.
Find out which type of debt consolidation loan would work best for you based on the numbers. Getting a second mortgage is a good idea if your first mortgage rate is very low. If you plan to move soon, you should do the same. If not, you might want to think about refinancing your whole mortgage to lock in even lower rates.
Start Shopping Mortgage Loans
Mortgage lenders put together loans that have different rates and terms. You can choose a mortgage with a low interest rate that changes over time, or you can choose a mortgage with fixed rates. You can also choose terms that will change how much you pay each month and how much interest you pay.
Once you know what kind of loan you want, start looking for a lender with a low annual percentage rate (APR). APR includes both interest rates and closing costs, which are often hidden costs of loans. Most of the time, the closing costs for second mortgages and lines of credit are lower than for traditional refinance loans.
Before choosing a lender, it's important to look at more than one. When you use the Internet, you can talk to lenders from all over the country. With so many more options, comparing loan quotes will help you find a great deal.
Getting the loan process over with
Fill out the loan application online for a quick response. Your final paperwork will be sent to you by mail so you can sign it within a few days. You get your money quickly and can pay off your bills.
