Your credit card bills are getting more difficult to pay each month, as interest rates keep going up, and many credit card companies have increased their minimum monthly payments. It's hard to keep up with rising costs of living. If you're having problems paying your bills, this may be the time to refinance your mortgage to pay off high interest rate credit cards, while fixing your mortgage interest rate.
Don't Fall for Credit Repair Schemes, Refinance Instead
No one likes to be late on their bills, or to admit that they have financial problems. It's easy to put things off, but if you're juggling your bills each month, you may be able to reduce your monthly expenditures by refinancing your mortgage for an amount sufficient to pay off high interest credit cards and consumer accounts.
Here's Your Homework
In order to determine if refinancing is feasible, you need to do some homework:
- Contact your lender to find out how much you owe on your present mortgage.
- Determine your home's current value. A real estate agent or lending professional can help with this.
- Subtract what you owe on your home from its current value. The result is the approximate amount of your home equity.
- If you have enough equity, you may be able to refinance for an amount sufficient to pay off your credit card balances and consumer loans.
- Calculate the balances of your credit and consumer accounts. Your goal is to pay off everything you can through refinancing.
- Seek assistance through a financial advisor or non-profit credit counseling agency. They can help you establish a realistic budget.
The amount you will be able to borrow for refinancing depends on several factors, but many lenders are somewhat flexible when borrowers want to pay off credit card debt. Perhaps the most important part of refinancing to pay off debts is to make every effort to live within your means. Credit cards are tempting, and using them "just this once" can lead to being in debt again.
