Leverage Equity to Eliminate High-Interest Debt
If you’re like the 41.2% of American households that hold credit card debt (at an average interest rate of over 22%), you’ll be happy to hear some good news: With the power of your home, you can pay off your credit cards and say goodbye to sky-high interest rates and huge monthly expenses—all while consolidating all your balances into one affordable monthly payment.
Your home’s equity is the key. That’s the amount your home is worth over the current balance of your home loan. When you tap into your home’s equity with a strategic refinance, you can pay off debts faster and pay less interest in the process. It’s a great solution for homeowners and can provide the stability that your family needs.
How much can I expect to pay each month?
Choose your rate and term and calculate your potential new monthly mortgage payment so you can make sure you have enough money left over each month for your other expenses. You might be surprised to see how affordable it is to refinance your home and consolidate your debt.
What debt should I consolidate with a mortgage refinance?
The best practice is to prioritize. First pay off debt that has a considerably higher interest rate than your mortgage.
Is a cash-out mortgage refinance to pay higher interest debt a good idea?
A cash-out refinance to pay off high-interest credit card debt makes financial sense, especially when coupled with the discipline to never again run up credit card balances.
Can I deduct the mortgage interest paid after refinancing from my taxes?
Yes, that’s the great news. While you can’t deduct most interest paid on consumer debt like credit cards from your annual federal income taxes. your mortgage interest is deductible. That can translate into even greater savings. Be sure to ask your tax advisor or accountant for more information.
How much can I save by consolidating debt?
Looking to pay off credit cards or other high-interest debt by tapping into your home’s equity? This calculator can help. Enter your credit card and loan balances as well as the mortgage balance you wish to consolidate by clicking on the ‘Enter Data’ button for each category. Next, change the consolidated mortgage loan amount, term or rate to create a loan that will work within your budget.