Refinancing a Mortgage to Consolidate Debt
For homeowners with available equity, refinancing may be one way to reorganize higher-interest debts—but the payment, total cost and risks should be considered together.
How the strategy works
A refinance can replace existing mortgage financing with a new structure and, where available, include additional funds used to pay other debts.
A lower payment is not the whole picture
Moving debt into a longer amortization can reduce monthly payments while extending how long the balance is repaid. Compare total borrowing costs, not only the monthly number.
Account for transaction costs
Existing mortgage penalties, legal or valuation costs and other charges can affect whether the proposed structure makes sense.
Consider what happens afterward
Consolidation is most useful when paired with a plan for the credit balances that were paid out so the same high-interest debt is not rebuilt.
Ready to take the next step?
Conixi can connect you with a licensed mortgage professional to review your situation.