If you have built up equity and you are carrying high-interest debt like credit cards, a cash-out refinance can let you pay that debt off and fold it into your mortgage at a much lower rate.
Why it can help
- Credit card rates are often far higher than mortgage rates
- One monthly payment instead of several
- Potentially big interest savings over time
The catch to understand
You are moving short-term debt onto a 15- or 30-year loan. The rate is lower, but if you only make minimum payments you could pay more interest in the long run by stretching it out. The math works best when you keep paying aggressively.
The discipline part
Consolidating only works if you do not run the cards back up. Pairing a refinance with a plan to stay out of new debt is what makes it a win.
We can show you the blended payment before and after, so you can see whether consolidating actually saves you money in your situation.