What does your level of debt look like? If you are like a great percentage of American consumers, you could use some debt consolidation advice.
A cash-out refinance could be your answer.
It is a low interest way to get out of the stranglehold debt has on you.
This is not a route that should be taken lightly, however.
The risks involved suggest that you should look over all your options for debt consolidation before you choose to make this decision.
Refinance means to finance again, in this case in the form of a newer loan used to accomplish a payoff an older, higher interest loan.
Cash-out refinance is generally a decision made in regards to mortgages.
For the sake of example, assume your home is worth $200,000.
Through the years of paying your mortgage, you have paid off $110,000, leaving you with $90,000 to still make payoff on.
When you do a cash-out refinance, you take out a new loan for $120,000, using $90,000 to make a payoff on your current mortgage and the other $30,000 as the funds you will use to make a payoff on other debts on credit cards or cars.
This portion is called the cash-out.
You could also use the money for home renovation projects.
Using this refinancing option gives you the chance to free up some cash for your other living needs and gives you a great chance to obtain better payment terms than you had on your old mortgage.
Seeking a lower interest rate is one reason people choose to take the cash-out refinance route.
However, as previously stated, there are risks you should be aware of before taking out this kind of loan.
First, doing cash-out refinance results in a longer time to pay off your mortgage because even though the first mortgage is paid off, you now have this second loan with more money owed.
Also, the equity on your home is diminished.
There is an associated concern that the extra money you needed to take out with the cash-out refinance loan will increase your monthly payments from what they were with your original mortgage.
If you improperly plan what your monthly payments will be after doing a cash-out refinance, you could run the risk of losing your home.
If your budget is strict and you have money set aside for an emergency, this option should not pose a problem for you.
View more details about this and other refinancing options at one of the many quality online mortgage resource sites today.