Cash out refinance to consolidate debt?

Guest 0.10 Dollars($)

Hello everyone. I am considering a cash-out refinance to pay off some of my debt. My house is worth about 385,000 and currently have two mortgages. Primary mortgage is 241,000 3 year arm at 4% (3rd year ends april 2007) and secondary mortgage is a HELOC (prime - 1.01) 52,000. I have about 40,000 dollars in debt which I got from starting my business. With my self-employed income which is now about 140,000 gross and about 90,000 net I am able to make the payments, but it's taking too long too pay off and I don't feel secure enough with my family. I was thinking of refininancing my 2 mortgages into one with a cash-out option of 20,000 which would give me a new mortgage of 313,000.

Can anyone shed some light on me wheather I'm thinking of doing the right thing? I am in a dilema and don't know what to do. Maybe there is some beter edvice that I have not thought about. Also my arm at 4% is running out.

Any advice would be greatly appreciated.

Thank you in advance

jerry · Posted: Mon Apr 17, 2006 9:39 pm Post subject: RE:

Hi,

Thats not a bad idea. You can go for it.

You can also consult DebtConsolidationCare for more help.

Thanks,
Jerry

Caron · Posted: Mon Apr 17, 2006 11:12 pm Post subject: RE:

Hi,

There's no problem if you go for a cash-out refinance but consider all other aspects before you make any decision. Your lender may charge prepayment penalty and there's a lot of closing costs involved in the transaction. Cash-out refinance will give you extrra cash and at the same time you can combine all your debts into a single loan. That goes to reduce your monthly payments but there are some other criteria which you should consider while making the decision.

Please go through our Community discussion on Cash-out refinance for further details.

Thanks,

Caron.

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