what is a debt consolidation loan?

Many people have a good mortgage rate and may think that refinancing or debt consolidation isn't an option.  But, the average consumer debt is rising and the interest rates on short-term or revolving credit can be as high as 22%.  So, debt consolidation or refinancing can put more money in your pocket every month.   Get a free rate check-up now!

Cash Flow Is Key

Today's consumers are overloaded with debt and may be struggling to make monthly minimum payments on their obligations.  A debt consolidation could reduce your monthly expenses dramatically.  Recently, we helped a borrower save $944 per month through this program.  That is over $10,000 per year back in her pocket.  So, cash flow is the primary goal of any refinance or debt consolidation analysis.

What are the costs?

The cost to refinance is often outweighed by the long-term benefit.  Our experienced loan officers will provide you a cost-benefit analysis so that you fully understand the up-front and long-term costs.  In the large majority of cases, clients can see a drop in their monthly payment, and often even reduce the length of their mortgage, which can save literally hundreds of thousands of dollars in interest.  This is a great wealth builder! 

Refinancing Often Provides Benefits Over a HELOC 

A HELOC (Home Equity Line of Credit) can also be used as a debt-consolidation loan.  However, this type of loan typically comes with a variable rate.  Depending on the current interest rates, this typically costs you more money, not less. In some cases, our clients use the debt consolidation loan to pay off a higher interest rate HELOC.  Our refinance loan programs are based on fixed interest rates, so your payment stays the same, regardless of what interest rates do in the future.  This can be a big benefit.

Is paying mortgage points worth it?

Before your loan closes, you’ll have the option to pay points on your mortgage, which is paying money upfront, to permanently lower your interest rate.  This can provide big benefits for some, while not as advantageous for others.  "It all depends on how long you plan to stay in your home or how much money you would like to save each month.  Depending on your goals, it can make sense to buy down the rate,.  The amount of money you have to pay to buy down your rate depends on the interest rate market.   This is where your free cost-benefit analysis will provide the best options for your situation.  

Getting cash-out for renovations

One of the reasons many homeowners are refinancing is to take advantage of great renovation loan programs to make their homes more usable, practical, and potentially increase the value.  These loans allow you to base the loan amount on the 'After Renovations Value' of your home, so you don't need equity in your home to take advantage of these programs.  However, you do need a lender experienced in renovation financing and, as always, a reputable, licensed contractor.

The experts at The Ratti Lending Team at Envoy Mortgage can help you determine if refinancing makes sense for you.  In many cases, we are able to help clients save a lot of money which means more money in your pocket every month!  In other cases, they have a decent rate and we simply help confirm that they are in a good place.  It costs nothing to find out, so why wouldn't you get a free cost-analysis?

Contact us today for a complete review in just 15 minutes.  We'll be able to tell you if it makes sense to refinance now or not!

For more information on refinancing, read this article:

 https://envoymaryland.com/blog/f/should-you-refinance 

https://rattilending.com/blog/f/should-you-refinance-a-heloc