Hello everyone, this is John Vecchitto, a local loan officer with North-East Financial in Middletown, CT. Today I would like to talk to you about refinancing for the purposes of debt consolidation.
When we think of refinancing, most people think about reducing their interest rate or reducing their term from a 30 year to a 15 year. They believe this will lower their monthly payment, and in turn save them more money a month. Although this may sound like a great option, a lot of people aren’t aware that they could use the equity in their home to pay down a high balance or high interest credit card.Let me give you an example: You have a mortgage payment of $1,500 a month and $40,000 in credit card debt in which you make monthly payments of $500 a month.Option 1: Refinance to reduce rate and/or term
As you can see, by refinancing for the purposes of consolidating your debt, you can save more money. Although your mortgage payment will increase you would no longer have to worry about the credit card debt. For most people this will also help people increase their credit score. If you are one of the many Americans out there with high credit card balances and have equity in your home, give me a call to go over your options. The minimum FICO score requires is 640 and you can borrow up to 85% of the value of your property.
Feel free to email me at johnv@northeast-mortgage.com or call/txt me on my cell at 860-918-0251. Thanks!
- New mortgage payment $1,300
- Credit card payment is still at $500
- Monthly Total $1,800
- New mortgage payment $1,700
- Credit card payments are now at $0
- Monthly Total $1,700
As you can see, by refinancing for the purposes of consolidating your debt, you can save more money. Although your mortgage payment will increase you would no longer have to worry about the credit card debt. For most people this will also help people increase their credit score. If you are one of the many Americans out there with high credit card balances and have equity in your home, give me a call to go over your options. The minimum FICO score requires is 640 and you can borrow up to 85% of the value of your property.
Feel free to email me at johnv@northeast-mortgage.com or call/txt me on my cell at 860-918-0251. Thanks!
