It’s easy to consolidate your debt and lower your monthly payments. How easy the process is depends on the financial partners you work with throughout the process. At Midland Mortgage Corporation, we have access to a variety of financial products useful for lowering your debt-to-income ratio. Not only does this mean you’ll have lower monthly expenses, but you’ll be able to qualify for better types of home financing.
If you own a home already, you can often use the equity in your property – the difference between its value and the amount you still owe on your mortgage – to pay for other expenses. This is called a home equity loan, and these loans are regularly used for debt consolidation. Why? Simple. Mortgage rates are at an all-time low, meaning you’ll pay less interest for a home equity loan than you might on a credit card debt.
It’s also a major convenience. You get an equity loan, use it to pay off your creditors and then have one bill to pay each month. Payments are lower, and so is your stress level. With just one bill to pay, you run a much smaller chance of missing a payment.
As residential loan specialists, we often assist clients in securing refinance loans. Much like a home equity loan, this type of financing is secured to pay off the balance of your mortgage. The refinance loan comes with a much lower rate, however, and can be extended to the value of your property. The more your home loan is paid off, the more money you’ll have left after paying off your mortgage balance. A refinance will help you kill two birds with one stone by giving you access to better interest rates and giving you the cash to pay your bills off in full.
These and other types of financing can help you significantly lower your regular monthly payments and your debt-to-income ratio, but there are other options available. Talk to a Midland Mortgage Corporation consultant about how to get cash from your home.