Mortgages generally go for 30 years so it is only natural that a long this time period you may come upon new financial circumstances in your life; after all, 30 years is a long time. Interest rates and the cost of living can mean that you have got yourself into even more debt than when you first took out your mortgage. Mortgage refinancing for debt relief is an option you can consider if you have found a different home loan package that may save you money or allow you to pay off your mortgage faster. If you have after some years, gained some equity in your property (that is, the value of your property exceeds the amount you borrowed for it), then you may wish to use that equity to finance life events such as your children's education or even an investment property. If buying a second property, refinancing your first mortgage may be an ideal way to save money.
The idea of mortgage refinancing in most cases is to free up cash that you can use for other purposes. If you have found yourself in a high amount of credit card debt, refinancing your mortgage can lower your monthly loan repayments and you can therefore put that spare cash into paying off your credit card.
Mortgage loan refinance and debt consolidation can be complicated process so you will need to speak to your local financial institution before making a final decision. If you are a trusted customer of the bank, they may automatically approve your refinance, whilst other times you may have to fill in lengthy paperwork. Generally however, there is a fee to refinance a mortgage.
Mortgage refinancing is a common method of debt consolidation. This is because a mortgage is almost always at a lower interest rate than other debts such as credit cards and personal loans. By rolling your other high interest debts into your mortgage, you can save a considerable amount on interest payments.