TBH Friends: Now that 20,000 Q posts are gone, you have time to read the the information below.
I originally wrote this column a year ago when we thought interest rates were as low as they could possibly ever go. HA, we were wrong.
If the weight of debt is dragging you down, you are not alone. The average debt in America (not counting a home mortgage) is $97,000. Credit card balances, car loans and student loans have put many of us in a position where we simply cannot see the light at the end of the tunnel. Credit card debt is the most daunting, carrying interest rates as high twenty percent! If this sounds all too familiar, now is the time to explore your options.
For homeowners, one option is to consolidate your debt and lower your monthly bills by refinancing your mortgage. With rates at all-time RECORD LOWS this option is even more attractive today. A cash out refinance allows you to turn a portion of the equity you have built up in your home into cash that you can use for whatever you like. It is your hard earned, invested money. Most people use it to pay off high-interest debt, fund a large purchase or finance a home improvement project.
The average interest rate charged on credit cards is nearly ten percent higher than that of a current 30 year mortgage. If you consolidate the credit card debt into your mortgage, you are effectively giving yourself a 10% return on your money. Some may argue that you would be simply extending the payoff of a short-term debt into a long-term debt. Really? For those making minimum payments on your credit card debt, you’ll never pay them off.
To calculate how much cash you can access from the equity in your home, take the estimated current home value and multiply by point eight. Then subtract from that number, the current balance of your home loan.
A cash out refinance will increase your mortgage balance by the amount of cash needed. This might cause your monthly mortgage payment to increase, depending on the interest rate and terms you qualify for. However, compared to the minimum payments each month on your credit cards it is likely your total monthly obligations may decrease significantly. It is not uncommon in these scenarios to see a total reduction of hundreds of dollars a month. And again, with rates low, you might reap that cash in your pocket without increasing your monthly mortgage payment at all.
Whether exploring a cash out refinance, planning to purchase a home, or considering building a custom home, please know I’m always here as a resource for you! Call (512-203-5869) or email (trey@treypowers,com) if I can ever be helpful OR if you just want to talk hunting.
As your TBH mortgage lender, I’m here for you!
Interest rates and loan terms are are subject to change without notice. Your exact rate or rate quote will be determined by your loan terms, credit scoare and value. Nothing in my posts are (or should be construed as) an offer to extend credit.
Trey Powers
Senior Loan Officer
City Bank Mortgage (An Equal Opportunity Lender)
1326 Hwy 290
Dripping Springs, Tx 78620
512-203-5869
trey@treypowers.com
NMLS 1294913
I originally wrote this column a year ago when we thought interest rates were as low as they could possibly ever go. HA, we were wrong.
If the weight of debt is dragging you down, you are not alone. The average debt in America (not counting a home mortgage) is $97,000. Credit card balances, car loans and student loans have put many of us in a position where we simply cannot see the light at the end of the tunnel. Credit card debt is the most daunting, carrying interest rates as high twenty percent! If this sounds all too familiar, now is the time to explore your options.
For homeowners, one option is to consolidate your debt and lower your monthly bills by refinancing your mortgage. With rates at all-time RECORD LOWS this option is even more attractive today. A cash out refinance allows you to turn a portion of the equity you have built up in your home into cash that you can use for whatever you like. It is your hard earned, invested money. Most people use it to pay off high-interest debt, fund a large purchase or finance a home improvement project.
The average interest rate charged on credit cards is nearly ten percent higher than that of a current 30 year mortgage. If you consolidate the credit card debt into your mortgage, you are effectively giving yourself a 10% return on your money. Some may argue that you would be simply extending the payoff of a short-term debt into a long-term debt. Really? For those making minimum payments on your credit card debt, you’ll never pay them off.
To calculate how much cash you can access from the equity in your home, take the estimated current home value and multiply by point eight. Then subtract from that number, the current balance of your home loan.
A cash out refinance will increase your mortgage balance by the amount of cash needed. This might cause your monthly mortgage payment to increase, depending on the interest rate and terms you qualify for. However, compared to the minimum payments each month on your credit cards it is likely your total monthly obligations may decrease significantly. It is not uncommon in these scenarios to see a total reduction of hundreds of dollars a month. And again, with rates low, you might reap that cash in your pocket without increasing your monthly mortgage payment at all.
Whether exploring a cash out refinance, planning to purchase a home, or considering building a custom home, please know I’m always here as a resource for you! Call (512-203-5869) or email (trey@treypowers,com) if I can ever be helpful OR if you just want to talk hunting.
As your TBH mortgage lender, I’m here for you!
Interest rates and loan terms are are subject to change without notice. Your exact rate or rate quote will be determined by your loan terms, credit scoare and value. Nothing in my posts are (or should be construed as) an offer to extend credit.
Trey Powers
Senior Loan Officer
City Bank Mortgage (An Equal Opportunity Lender)
1326 Hwy 290
Dripping Springs, Tx 78620
512-203-5869
trey@treypowers.com
NMLS 1294913
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