We strongly urge anybody who finds themselves underwater with several lines of debt to consider debt consolidation through refinancing. Rather than just ignoring the problem or declaring bankruptcy, there’s usually a more prudential way to approach personal debt. Here, we want to look at some ways you can positively affect the rates you’re paying on your loans by consolidating.
The basic concept is to gather all your debts together under one interest rate, hopefully, a low one. This is a particularly good idea for clients whose debt consists of credit cards and other high-interest instruments. It isn’t so much that you are “reducing” the principle of your loans, as much as you’re simplifying them under a more favorable interest level.
Caveat: Whenever you consolidate loans, one of the worst things you can do is allow this peace of mind to lure you into purchasing more debt. Doing so will only snowball the problem that got you into debt in the first place. To be successful with debt consolidation, you must take the necessary measures to organize your budget and finally get out of debt for good.
When we discuss mortgages, there’s a refinancing option called a Cash-Out Refinance. This allows the owner to swap one mortgage for a higher one, ultimately leading to a “cash-out” once you finish paying. This requires that you have equity in your home. Once you do the cash-out, you can borrow from equity to help consolidate loans.
We also want to emphasize that this is only a cursory look at how this works in real life. Therefore, it’s in your best interest to enlist the services of qualified financial professionals, like AHL Hard Money Network, to assist you in debt consolidation and cash-out refinancing. As with anything to do with finance, there are risks involved, and you must understand them before taking any consolidation measure.
A H L Hard Money Network exists to help consumers pay off debt with creative mechanisms such as hard-money loans, consolidation, and free & clear refinance. If you’re over your head in debt, you don’t need to capitulate. Let us help you get your finances back under control by calling us at (813) 516-5210.