At some point in their lives, many people experience financial difficulties and have trouble paying their bills. If you’re facing stressful debt, the first step toward becoming debt free is to face your problems and identify ways of reducing your outstanding obligations that work for you. Getting rid of debt can be hard work, but it’s well worth it.
The COVID-19 pandemic had a huge economic impact across the U.S., due in large part to business closures and job losses. More than half of all Americans have seen their credit card balances expanding as they carry balances from month to month, accruing even more debt as time goes by due to the high interest rates they carry.
However, the good news is that homeowners throughout the country are experiencing record of levels of equity due to the hot housing market and skyrocketing home prices. Therefore, one way some people are lowering the monthly payments on their debt is by consolidating it.
If you own your home and have sufficient equity, you may want to consider consolidating high-interest debts through a cash-out refinance. A cash-out refinance is when you replace your existing home loan with a new loan for more than you currently owe. The additional amount may then be used by you to pay off your higher interest debts.
When you are short on money, but have equity in your home, cash-out refinancing can provide the money you need at lower interest rates. It can be a good choice if it improves your overall financial situation. Of course, your home is still the collateral for the new loan and using the cash will reduce your current equity.
Another solution to unlocking your equity to reduce your debt is through a home equity loan or home equity line of credit (HELOC). Instead of replacing your existing home loan, you leave your existing mortgage terms unchanged and add a second mortgage or a line of available credit to put toward consolidating your debt. Once the second amount is paid off, you’ll owe only the remaining balance of the original loan.
1 Stop Lending can help you find the best strategies available to you to help pay off your debts. After nearly two decades in the industry, you can rest assured that we are knowledgeable professionals with the expertise and attention to detail that you deserve.
If you are interested in learning more about unlocking your equity to pay off your debts, we are just one phone call, text or email away from answering any questions you have. Please visit https://1stoplending.net for more information.