Before mortgage interest rates begin to rise, homeowners must take
advantage of low rates and refinance their mortgage. Refinancing serve many
useful purposes. Aside from presenting the perfect opportunity to lock
in at a low rate, many homeowners are able to borrow against their
equity and use the money to become debt free.
What Are Debt Consolidation Refi Loans?
Consolidating debts has become an effective means for reducing and
eliminating debts. Many people have more debt than they can handle. Some
have discovered quick ways to get out of debt. Yet, millions of people
struggling to pay minimum fees continue to search for a strategy.
If you own a home, there may be a practical answer to reducing debts.
Debt consolidation refinance loans are extremely popular and for good
reason. Your home is literally a cash machine. In order to tap into the
equity, most people choose to sell their homes. However, if you select
a refinance, it is possible to receive cash from the equity, while
continuing to live in the home. The money can be used to consolidate debts
and improve credit score.
How Do They Work?
The concept of a debt consolidation refi loan is very simple, and
doable. To begin, homeowners must agree to create a new mortgage loan. This
involves applying for a new mortgage with a new lender or your current
lender. Most people apply for a new loan in order to get a lower rate,
etc.
In addition to obtaining a better rate, homeowners who have built a
large amount of equity in their homes have the option of borrowing money
from their equity. This is termed a cash-out refinancing. By doing so,
the new mortgage principle will be higher than the previous. Once
homeowners obtain their money at closing, the funds may be used to payoff
their debts. This is a smart maneuver for individuals hoping to raise
their credit score.
Comparing Refi Lenders
Although your current mortgage lender will be more than happy to assist
you with a new mortgage, it is important to shop around and compare
offers from other refi lenders. Comparison shopping is very essential if
you have poor credit. The easiest way to compare different lender rates
is online. Many mortgage sites offer online comparisons and instant
quotes.
Carrie Reeder is the owner of http://www.abcloanguide.com. View her recommended sources for a debt consolidation refi loan.
View her recommended lenders for refinancing to consolidate debt. Also,
view her recommended "get me out of debt" companies online.