Are you paying off high interest debts? If so, you may feel like it is impossible to catch up. You are pouring so much money into the interest that it is taking forever to pay off the principals.
You can give yourself a chance to pay off your debts more rapidly by consolidating them. One way you can do that is through a cash-out refinance. Below, we go over some of the advantages of this debt consolidation method.
You Need To Know About Refinancing
- Get rid of high interest debt. Having high interest debt is a bit like standing close to a particularly hungry black hole. Your interest payments do not help you get out of debt; they only benefit your creditor and do nothing for you. Through your refinance, you can finally escape the gravitational pull of that black hole for good. You will still owe interest, of course, but it will not be as high, making it easier to put money toward paying off your home loan principal (which will be the only one remaining).
- Improve your credit score. Another of the advantages of refinancing for debt consolidation is that your credit utilization ratio can sometimes decrease. Plus, you will no longer have as many outstanding debts in your name. You may see improvements to your credit score as a result of making these positive financial changes.
- Simplify your financial life. Life can be complicated when you have so many old bills and debts to keep track of. In fact, it is easy to miss payments, making matters worse. One of the benefits of consolidating your debts by refinancing is doing away with all that complexity, and reducing it all down to a single payment.
- Stress less. Not all the benefits of consolidating debts through refinancing are purely financial. The emotional benefits are not to be understated. It is very stressful managing payments for multiple debts each month, each with a high interest rate. By contrast, it is not nearly as stressful just sending in one payment each month and knowing that you are not draining all your money through a high interest black hole. Feeling more relaxed about your financial life can be good for your mental wellness.
- Make changes to your mortgage. Another advantage of using this method for debt consolidation is that you can also take the opportunity to adjust some things about your home loan if you wish, and maybe lock in a lower mortgage rate while you are at it.
Refinance and Consolidate Debts Now With First Residential
There are answers to your questions about mortgage refinancing and whether it is the right method for you to finally consolidate your high interest debts.
To get those answers or refinance today, please give First Residential Mortgage a call at (540) 838-5868 to schedule your consultation. Our offices are in Blacksburg, and we work with homeowners throughout Virginia. We look forward to helping you reduce your high interest debts and effectively grow your wealth.