Cash-out Refinance
The average Americans household is carrying a record amount of debt in 2024. Because of this, some people are considering debt management options such as debt consolidation. Debt consolidation is sometimes called cash-out refinance, mortgage cashout refinance, paying off debt with equity, or one loan mortgage for debt consolidation.
If you have a large amount of equity in your home, you may be able to cash out your equity and refinance into a new, higher-balance loan. This option is for people who would like to eliminate debt or have cash for a large purchase.
A cash-out refinance usually has a higher interest rate than a typical refinance. Keep in mind that although the interest rate will be lower than that of a typical credit card, the payments will be over 15 to 30 years, so there will probably be a higher total payment. This process would also use one’s home to turn unsecured debt into secured debt.
