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Debt consolidation is the primary reason people refinance today. Since property has appreciated in value, many clients decide to use the "equity" to reduce their monthly payments.There are many programs to unlock the equity in your home and reduce your payments. |
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Debt Consolidation Refinance |
In a debt consolidation refinance, determine the balance of your mortgage, and the amount of cash you are taking out plus any closing costs. The total is your loan amount.
An appraiser will determine the value of your property which will be used to determine your Loan to Value (LTV).
There are programs which will allow you to borrow 80, 90, or even 100% of the value of the home in this "Debt Consolidation Refinance" transaction.
One way to make a refinance work for you is to refinance for more than the balance remaining on your old mortgage -- in effect, tapping your home equity, or "cashing out,".
Thanks to favorable rates and variety of different products available, you may be able to do so without increasing your monthly payment and potentially even decrease your payment. |
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| Credit Card Debt |
| Bad debt is debt that is unnecessary. Whether you have racked up credit card debt by using your credit card for big ticket items such as new automobile tires, or everyday things such as groceries,
once a billing cycle goes by without you paying off the balance in full, you are carrying bad debt. Why Pay Credit Card Balances Off Monthly? |
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The problem with carrying credit card debt is that the interest on the card will typically accrue much quicker than the minimum payment will pay off the debt. It can take years
to pay off several hundred dollars, and in the meantime your interest charges have far exceeded the amount that you originally borrowed. |
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| Another problem with not paying your card off in full each month is that it gives you an unrealistic idea of what you can afford. Whether you are using your credit card for dinners out on a weekly basis or big ticket purchases twice a year, if you do not
have the money in the bank to make these purchases, then you cannot afford them. When will Your Credit Card Debt Catch Up with You? |
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This chronic low level overspending may not catch up with you for years. Often we do not realize how much we depend on this borrowed income
until something happens that takes away our ability to use it. This is one of the biggest money problems people suffer. At the time they most need access to credit, it often unavailable. |
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If you pay make it a habit to pay off your balances monthly, and train yourself to live within your means, you can use credit as an effective tool, rather than allowing it to control you.
An injury at work can lead to you taking some unpaid sick time from work. If you have no credit card debt, you will get along much better for two reasons.
One, there will be no monthly minimums to worry about, so your monthly expenses will be lower, and two, if you genuinely are tight on cash, you can use your credit
card to buy some groceries, knowing that you can pay it off when
you get back to work. |
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Many couples often want one parent to stay home when they are ready to start a family. While many think that there is no way that they could afford it, they often find that if
they commit to paying off their credit card debt first, that in fact, one parent can stay home. Without the monthly minimum payments to worry about, along with lower commuting,
eating out, and dry cleaning expenses, staying home is often very affordable. In addition, if you have trained yourself to live within a budget, it is much easier to continue to live within a
budget once baby arrives. |
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