Large purchases that you would usually finance, such as a new car, can be bought using money from cash-out refinancing, letting you pay for your expenses at much lower interest rates. Consolidating debt allows you to make one easy monthly payment instead of keeping up with several bills. Debt consolidation also gets rid of harassment from collections and may be the way to help you get a handle on your debt.
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If any of the following describe your current mortgage you may want to consider
- Your mortgage rate is too high
- Your mortgage term is too long or too short
- Your monthly payments are too steep
- Your mortgage does not have a fixed rate
- Your adjustable rate cap is not low enough
Homeowners also refinance as a way to fund home improvement, a new car, college tuition, or debt consolidation. Loans obtained through financing generally have much lower interest rates than those used to finance a car and can be far more convenient than the available student loans. Also, there is the added benefit that many homeowners will be able to deduct interest payments from their taxable income.
Mortgage refinance is the process of taking on a new mortgage to pay off an original mortgage. The purpose of this process is to move from a high interest rate or an adjustable rate loan to a lower interest rate or a fixed rate loan.