If you need to eliminate debt and you have thought about obtaining the funds with a cash-out refinance home loan, you need to follow a series of steps in order to know whether you could benefit by consolidating all your debt into a single mortgage loan and how you can actually apply, obtain the cash and use it to eliminate your remaining debt. Following you will find a few easy steps you should follow to obtain extra funds from your property by refinancing and use the money to eliminate your outstanding debt.
Assess Your Financial Situation
It is important that you analyze your financial situation before making any type of decision. Whether it is advisable to obtain a cash-out refinance home loan or not to eliminate debt will depend on several factors that constitute your finances. The first thing that you must analyze is how much debt you will need to consolidate with the amount of money you get out of a cash-out refinance home loan. Unless you have subsidized loans like student loans or loans with high prepayment penalty fees, chances are that you should consolidate all your outstanding debt with the mortgage refinance home loan.
Also, check how much money you are spending monthly in terms of debt repayment. Add up mortgage payments, car loan payments, unsecured loan payments, credit card average balance payments, etc. This will provide you a reference amount to compare with the monthly payments of the new loan and uncover at a first glance how much money you will be saving each month on debt payments. It is also advisable (though not imperative) to see how much interests you are paying each month and annually to see how much money you will really be saving.
Finally, find out how much equity is available on your property to see what kind of money you can obtain by applying for a cash-out refinance home loan. If you do not know how much equity is available on your property, find out the value of your home (contact a real estate agent to get an approximate value) and ask your mortgage lender how much money you still owe on your mortgage loan. Equity will be the difference between the value of your property and the amount of outstanding debt on your current mortgage loan.
Request Loan Quotes And Compare
With the amount of outstanding debt in mind, request refinance mortgage loan quotes and compare the monthly payments to see how much money you will be saving both monthly and over the whole life of the loan. Say for instance that you currently owe $30,000 apart from your mortgage loan and the payments on that debt add up to $1200 a month. If you request loan quotes for a refinance mortgage loan of an amount equal to your current mortgage balance plus $30,000 and the resulting monthly payments are lower than your current mortgage payment plus $1200, you would be closing on a good deal. Truth is that with a cash-out refinance home loan you will probably be able to obtain almost a $600 reduction on your overall debt monthly payments under this scenario.
About the Author
Amanda Hash is an expert financial consultant who specializes in Personal Consolidation and Unsecured Loans Bad. By visiting http://www.yourloanservices.com/ you'll learn how to get approved and recover your credit.
Wednesday, March 4, 2009
Subscribe to:
Post Comments (Atom)
No comments:
Post a Comment