Consolidating debt with a new purchase mortgage
If your new mortgage amount is too high relative to how much your home is worth you may exceed the lender’s limit.If your property value is not high enough you may need to reduce your mortgage amount which likely lowers the amount of debt you can consolidate.For example, you may have credit card, student or car loans that charge a high interest rate.With a debt consolidation refinance you can pay off this high interest rate debt with a mortgage with a much lower interest rate.Your loan proceeds pay off your current mortgage balance first, then closing costs and any remaining funds go to pay off debt.Any proceeds that remain after paying off debt go to the borrower. Our calculator compares your combined current monthly mortgage and debt payments to a new single mortgage payment to determine how much money you can save on a monthly basis with a debt consolidation refinance.We can tell you more about home equity loans and home equity lines of credit that can help lower payments and simplify your life.Use our Debt Consolidation Refinance Calculator to determine how much you can save by paying off high cost debt when you refinance your mortgage.
Our calculate uses the following key inputs to enable you to evaluate this refinance option: Existing Debt Balance.
Home equity loans are available as fixed or adjustable-rate mortgages.
Borrowers pay an origination fee, which can be rolled into the loan, plus an appraisal fee and title insurance.
Because mortgage rates are usually lower than the rates for other types of loans such as credit cards, you may be able to save money by consolidating all or part of your debt when you refinance.
A debt consolidation refinance can be complicated because it involves several loans and different interest rates.