Cash-Out Refinancing - Suitable For Eliminating Debt?[By Jess Peterson]

Following you will find a few easy steps you should follow to obtain extra funds from your property by refinancing and use the money to eliminate your outstanding debt.
Assess Your Financial Situation
It is important that you analyze your financial situation before making any type of decision. Whether it is advisable to obtain a cash-out refinance home loan or not to eliminate debt will depend on several factors that constitute your finances. The first thing that you must analyze is how much debt you will need to consolidate with the amount of money you get out of a cash-out refinance home loan. Unless you have subsidized loans like student loans or loans with high prepayment penalty fees, chances are that you should consolidate all your outstanding debt with the mortgage refinance home loan.
Also, check how much money you are spending monthly in terms of debt repayment. Add up mortgage payments, car loan payments, unsecured loan payments, credit card average balance payments, etc. This will provide you a reference amount to compare with the monthly payments of the new loan and uncover at a first glance how much money you will be saving each month on debt payments. It is also advisable (though not imperative) to see how much interests you are paying each month and annually to see how much money you will really be saving.
Finally, find out how much equity is available on your property to see what kind of money you can obtain by applying for a cash-out refinance home loan. If you do not know how much equity is available on your property, find out the value of your home (contact a real estate agent to get an approximate value) and ask your mortgage lender how much money you still owe on your mortgage loan. Equity will be the difference between the value of your property and the amount of outstanding debt on your current mortgage loan.
Request Loan Quotes And Compare
With the amount of outstanding debt in mind, request refinance mortgage loan quotes and compare the monthly payments to see how much money you will be saving both monthly and over the whole life of the loan. Say for instance that you currently owe $30,000 apart from your mortgage loan and the payments on that debt add up to $1200 a month. If you request loan quotes for a refinance mortgage loan of an amount equal to your current mortgage balance plus $30,000 and the resulting monthly payments are lower than your current mortgage payment plus $1200, you would be closing on a good deal.
Truth is that with a cash-out refinance home loan you will probably be able to obtain almost a $600 reduction on your overall debt monthly payments under this scenario.
---
Jessica Peterson writes finance articles for Yourloanservices.com where she shares her knowledge about how to get money for a starting-up business, consolidating any kind of debt, repairing a home even with a bad credit history and more.
Article Source: http://EzineArticles.com/?expert=Jess_Peterson

Comments

Post a Comment

Popular posts from this blog

Refinance your Home Loan and Get Extra Cash

Many things have to be considered, you should compare lenders, rates, costs, interest types, etc in order to make a well informed decision. Refinance Mortgage ExplainedWhen you decide to refinance a mortgage you’ll be canceling a previous loan with the money amount obtained from a second loan. Unless of course your motive is that you are not being able to meet the monthly payments you should make sure that the new loan has overall better conditions than the previous one. Refinance Advantages The first thing to consider is the interest rate. You may be able to obtain a refinance with a lower interest rate because market conditions have improved or because your credit and financial situation have improved. Either way, pay special attention to other costs as you may be paying as much in extra fees as what you can save by reduced interests. If your current mortgage interest rate is variable you may want to refinance your home loan and obtain a fixed interest rate, this will give your month
Read more

Should You Use a Home Equity Loan to Pay Off Credit Cards?

With credit card interest rates rising right through the roof, some homeowners may be wondering whether a home equity loan or line of credit ( HELOC ) is the way to get their debts under control. The answer is a definite maybe. While it's much harder to tap your home equity than it was in the past, it's not impossible. Yes, credit is much tighter in general these days, the decline in home values in recent years means that many homeowners no longer have any home equity to draw upon and banks are concerned about possible further declines in home values. But many homeowners still retain considerable equity in their homes, particularly those who don't live in states like Florida, Arizona, Nevada and California, which have borne the brunt of the housing market decline. Such homeowners continue to be attractive clients for lenders. And many homeowners retain untapped credit in their HELOC, which is still available for them to draw upon. Lower interest rates on a home equity lo
Read more

How to Refinance a Mortgage With Bad Credit(By Brandon Cornett)

A common question among homeowners looking to refinance is, "Can I refinance my mortgage loan with bad credit ... and if so how?" The short answer is yes, you can certainly refinance your mortgage loan with bad credit. The longer answer is that you must go about things differently than a homeowner with good credit. And you'll need to make sure that refinancing the mortgage makes financial sense, given your bad credit situation. We will talk about refinancing a mortgage loan with bad credit in a moment. But first, let's talk about the reasons why people refinance in the first place. Everything will make more sense if we start with this. Why Do Homeowners Refinance? Mortgage refinance is always a popular topic among homeowners. Many homeowners feel the lure of lower interest rates and seek to refinance their mortgages in order to capitalize on lower rates. If done properly, the refinancing process can lead to significant savings over the life of the new mortgage loan. A
Read more