08/16/2023
The average American has $185,000 in available equity. This means that so many have money in their home that’s just sitting there, not working for them.
And at the same time, Americans are nearing a trillion dollars in credit card debt with exponentially high interest rates, anywhere from 18-28%.
With that in mind, could refinancing to a higher mortgage rate actually SAVE you money? Let’s look at an example.
Let’s say you have a $300,000 mortgage, 30-year fixed-rate with a 3.50% interest rate.
Your monthly principal + interest payment is $1,347.13.
You have $50,000 in credit card debt, and you’re paying the minimum payment each month, which is typically 3%, or $1,500/month. So at minimum, you’re paying $2,847.13/mo total.
Now, let’s say you do a cash out refinance and roll that $50,000 of debt (plus an estimated $10,000 closing costs) into a 30-year fixed-rate mortgage at 6.50%. Your new loan amount is $360,000, and your new monthly principal + interest payment is $2,275.44.
You’ve eliminated that debt, eliminated that headache, and potentially boosted your credit score in the process after paying off consumer debt - all while SAVING nearly $600/month! Think of all you can do with that extra money each month! I have some ideas...
If you’re a homeowner with significant debt, this may be a great option for you. Give me a call, and let’s see if a cash out refinance could set your future up for financial success.
