Like many people, you may have amassed a decent amount of debt over time. For example, you may have relied on credit cards rather heavily to make purchases of different types. You may have an outstanding car loan. You may also have a home with a mortgage.
You may be at a juncture at which you’ve decided to revaluate your debt. As part of this endeavor, you may be contemplating debt consolidation and refinancing your home mortgage. There are some benefits that can be realized via debt consolidation and refinancing your home mortgage loan.
Lower Interest Rate
Through debt consolidation and home mortgage refinancing you may be able to realize a more favorable interest rate. For example, if you a good deal of your consumer debt unrelated to your home mortgage is in the form of credit cards, you likely face high interest rates through this type of debt. You may be able to make a significant impact on the interest rate or rates you’re paying on credit cards through the debt consolidation process.
Similarly, depending on your credit history, you may be able to knock a bit off the interest rate you pay for your home mortgage loan by refinancing. The specific deduction in the interest rate may not seem significant on the surface. However, over the lifetime of a refinanced home mortgage loan, even what seems like a minimal decrease in the interest rate can add up to a significant savings on the cost of a loan over the lifetime of a mortgage.
Improved Financial Management
Another important benefit that can be realized by debt consolidation and home mortgage refinancing is improved financial management. For example, with debt consolidation, rather than pulling out your checkbook and making multiple payments each month on credit card and other debts, you make only one payment on the consolidated loan. The reality is that this can end up saving you a considerable amount of time. In addition, because you are only dealing with one bill to pay rather than many, you are not apt to make a mistake and miss a payment.
Saving Money Each Month
If you are like many individuals and families in this day and age, you may be living from one paycheck to the next. Even if you don’t live from paycheck to paycheck, you may have to maintain a tight budget.
By pursuing a debt consolidation loan, home mortgage refinancing, or both, you are likely to end up with more money available in your budget each month. The reality even a bit more breathing room in your monthly budget can be truly beneficial. You may be able to develop a bit of cushion in the event of some sort of emergency, for example. You may be able to save money over time for something you desire, perhaps a family vacation.
Speed Up Home Mortgage Payments
The combination of debt consolidation and refinancing your home mortgage can have other benefits as well. One such benefit is that this process may place you into a position to have more available money to permit you to pay off your home loan in a shorter period of time. Many people do want to get out from under their home mortgage loans sooner rather than later. In some instances this combined strategy provides an idea vehicle to accomplish this objective.
In the final analysis, there truly are significant benefits to be realized by employing these strategies in tandem. You might want to consult with a financial advisor to get a comprehensive understanding of what strategies overall can prove helpful to you in bringing better order to your financial house.