Another Way to Reduce Debt
Even though our economy is generally bullish, personal debt is at an all-time high thanks to maxed out credit cards.
Thus, if you’re looking for a way to consolidate your many bills, why not consider refinancing as an option?
Refinancing is the process of switching your current mortgage to a new lender. That’s fine, you may say, But how does that help with my existing debts?
Basically, your new financial institution may also give you the opportunity to borrow enough money to pay off your creditors. Alternately, your lender may have a program to help you consolidate all your bills.
Will you still have to pay off all you owe? Absolutely. However, you won’t have to pay out as much each month, and that means you’ll have more to save or to put towards the principle of your remortgage.
For example, if all your bills, including your mortgage, add up to around 1,000 each month and you only bring in 900, you’re bound to get further and further behind on payments. In the end, this can wind up with disastrous consequences, including repossession of your home or the need to file for bankruptcy.
However, if you refinance your property you can significantly reduce your payments if you consolidate all your current debts, you may only need to pay out 800 per month. This means you have an extra 100 to save or put towards the principle amount of your refinance.
With this kind of a set-up, you can get and stay out of debt, stop the endless phone calls from angry creditors or collection agencies, and eventually rebuild your credit history.
Best of all, the process of getting a refinance is relatively simple and may even be easier than when you obtained your first mortgage. Though it should take a few weeks to settle all the financial arrangements, it’s typically fairly simple and the paperwork is relatively easy-to-understand.
Remember a refinance just might be your ticket to making sure the phone only rings with calls from friends and family.