Are you still trying to financially recover from the holidays? Has it become financially impossible to pay your bills and your mortgage? If it seems like you are hemorrhaging money, you're not alone. Most American homeowners struggle to keep themselves out of debt. In fact, one in five Americans say they did a poor job of managing debt in 2005, reports USA Today. However, there is a sure-fire way to climb out of the debt trap -- refinance.
Refinancing your home allows you to replace your current home loan with a loan that has better terms. And yes, interest rates and payment schedules are adjusted to help you improve your finances.
Reasons for refinancing your home include:
- To lower the interest rate on your mortgage, reducing your monthly payments and overall cost.
- To reduce the term or length of your loan, doing so can save you thousands of dollars in interest.
- To provide a means of consolidating your debt.
Additionally, more Americans are projected to refinance in 2006. "Refinancing activity was very strong in the fourth quarter [of 2005], even with higher interest rates," says Amy Crews Cutts, Freddie Mac deputy chief economist, in a company-issued report."We expect the share of all refinance borrowers who take out cash to remain high in 2006 because of relatively high cost of second mortgages and home-equity lines of credit," Cutts adds.When you refinance your home, you 'free up' additional funds that can be used to pay off debts ranging from credit card bills to student loans and personal loans. If you're drowning in debt and need help refinancing can help you.