Find your best debt consolidation loan

Refinancing to a lower mortgage rate can produce cash flow, reduce monthly mortgage payments, and assist with paying off your mortgage loan faster. Using mortgage calculators can help with comparing mortgage rates and multiple scenarios for refinancing your mortgage.

Debt consolidation options: Finding a good match

Homeowners can tap home equity for additional cash for paying off credit card debt and other bills. Cash-out refinancing may cost more than a straight refinance. Compare mortgage quotes and the annual percentage rates (APR) for each mortgage quote. The APR is an interest rate that incorporates the interest charge plus the cost of getting the loan. It is usually higher than the stated rate but not always. There are three ways to access home equity for debt consolidation:

• Cash out refinance: This refinance replaces your old mortgage and provides additional cash for paying off consumer debts; rolling your consumer debts into your refinance mortgage provides one payment instead of several. How much you can save depends on how much you owe, how much your home refinance costs, and the APR for your debts. Closing costs must be deducted from potential savings associated with converting credit card debt to lower APR mortgage debt.
• Home equity loan: A home equity loan, also called a second mortgage, delivers cash at closing that is repaid with scheduled monthly payments. A second mortgage closing costs are quite low. Home equity loans are a good option for meeting a one-time expense, but if you're tempted to use credit cards again after paying off your balances you risk owing more against your home along with additional credit card debt.
• Home equity line of credit (HELOC): A HELOC is useful for cleaning up a few small bills on a one time basis, but it's important to remember that a HELOC is a mortgage and can be foreclosed for non-payment. You'll pay finance charges only on the amount drawn from your HELOC.

Mortgage lenders can provide mortgage quotes and other information about home loan options useful for debt consolidation.