Simplify Life
Smart Refinance Solutions
If you are in debt, you’re not alone. By some estimates, almost 4 out of 5 Americans owe some kind of debt, and the total amount of debt (including unsecured debt) in this country is in excess of $14 trillion. This means that close to 80% of the people you see out and about throughout your day carry some kind of debt that they’re working to pay off.
The good news is that if you are serious about taking the next steps in your life and working towards financial freedom, we can work with you to identify strategies, loan options, and tools you can use to one day become debt-free and own the home of your dreams!
Overwhelmed by
high-interest debt?
The average U.S. household with credit card debt has a balance over $7,000, according to the Federal Reserve Bank of St. Louis. The interest rate on this debt rose to 21% in 2023 from 15% in 2021. That average indebted household went from paying $90 per month in credit card interest to $126 per month in credit card interest alone.
Credit card debt can quickly spiral out of control with high-interest rates that make it hard to get ahead. Refinancing your mortgage can help you consolidate this debt into one manageable payment at a lower interest rate. By tapping into your home’s equity, you can pay off those credit cards and save money in the long run.
Struggling with
Student Loan Payments?
Average student loan debt per borrower is over $35,000, according to quarter three data from Experian, one of three main credit bureaus in the United States.
Student loan payments can be a significant burden on your monthly budget. Refinancing your mortgage might allow you to consolidate these loans into your home loan, often at a lower interest rate. This process means one less payment to worry about and more money in your pocket each month.
Managing
Medical Bills?
You are not alone. Individuals in the U.S. owe at least $220 billion in medical debt. Approximately 14 million people (6% of adults) in the U.S. owe over $1,000 in medical debt. Additionally, 3 million people owe medical debt of more than $10,000, according to the KFF-Peterson Health System Tracker.
Unexpected medical expenses can put a strain on your finances. By refinancing your mortgage, you can access your home’s equity to cover these costs, reducing the financial stress and allowing you to focus on your health and well-being.
Additional
Life Events
Experiencing Life Events?Â
Life is full of significant events that can impact your financial situation. Whether it’s growing your family, sending your kids to college, going through a divorce, or dealing with the loss of a loved one, these moments can create a need for financial flexibility. Refinancing your mortgage can provide the extra funds you need during these times.Â
Family Expansion: A new addition to the family often means higher expenses. Refinancing can help you access your home’s equity to cover these costs, allowing you to focus on what matters most.Â
College Tuition: Sending your children to college is a significant milestone, but it comes with high costs. Refinancing can offer a way to manage these expenses without sacrificing your financial stability.Â
Divorce: Going through a divorce is challenging both emotionally and financially. Refinancing can help you settle joint debts or buy out your partner’s share of the property, providing a fresh financial start.Â
By leveraging your home’s equity, refinancing can provide a financial cushion during life’s ups and downs. It’s not just about interest rates; it’s about giving you the flexibility and security you need to navigate these events.Â
Dreaming of
home improvements?
Want to upgrade your kitchen, add a deck, or finish the basement? Refinancing your mortgage can give you the funds needed to make these improvements. By leveraging your home’s equity, you can invest in your property and potentially increase its value.
Did you know a garage door replacement ($4,513) can provide over 150% ROI on its resale value ($8,751), according to a 2024 Cost vs. Value Report by Remodeling Magazine?
Which home improvement projects can be financed through refinancing?
A minor kitchen remodel, siding replacement, and the addition of a deck all recoup nearly 100% of their investment as well. -add AC, maybe roofing.
How can refinancing my mortgage help me?
1. Simplified Finances: Combining all your debts into one loan minimizes the number of payments and interest rates you have to think about each month. This can also improve your credit by reducing the chances of missed or late payments.
2. Potential for Lower Interest Rates: Depending on your credit score and market conditions, refinancing can lower your overall interest rate, saving you money over the life of the loan.
3. Smaller Monthly Payments: Refinancing can lower your monthly payments by extending your loan term, freeing up cash for other expenses.
4. Improved Credit Score: By consolidating your debts and making consistent, on-time payments, you can improve your credit score over time.
Can I use refinancing to
consolidate my debt?
Yes. Americans’ total non-housing debt is $4.87 trillion, according to the Federal Reserve Bank of New York’s household debt and credit report for the first quarter of 2024. Auto loan debt makes up $1.62 trillion of that total.
Refinancing your mortgage can simplify your finances if you have multiple types of debt—like personal loans, car loans, or credit cards. It combines all your debts into one easy payment, often with a lower interest rate, making it easier to manage and pay off over time.
Example Scenario
What does it look like?
Don’t let the fear of a higher mortgage rate scare you away from net savings each month. Check out this example to see how a refinance could save you money.
Scenario
· Mortgage: $200,000 at 3.5%
· Monthly payment (principal and interest): ~$900
· Credit card debt: $20,000 at 20%
· Monthly credit card payment: $500
After refinancing with Delmar Mortgage
· New mortgage: $220,000 at 6.5%
· New monthly payment (principal and interest): ~$1,390
· Credit card payment: $0
In this example, while the mortgage payment increases by about $490, the $500 monthly credit card payment is eliminated. This results in a net savings of $10 per month and reduces the high-interest debt.
In summary, even with a higher mortgage rate, refinancing to consolidate higher-interest debts can lead to lower overall monthly payments, potential tax benefits, and long-term savings.
Use our mortgage calculator to illustrate a more relevant example of your financial situation.
I think I want to refinance
What are important factors to consider?
- Additional Costs: Be aware of fees associated with refinancing, such as closing costs and origination fees. Make sure you understand the total cost before proceeding.
- Longer Repayment Term: While your monthly payments might be lower, you could pay more in interest over the life of the loan if you extend the term.
- Risk of Increased Debt: Adopting good financial habits is essential to avoid falling back into debt after consolidating.Â
Our experienced loan officers can advise you on when refinancing is right for your financial situation.
What are the benefits of refinancing my mortgage?
Refinancing your mortgage can be an excellent tool for managing high-interest debt, covering significant expenses, or funding home improvements. However, it’s crucial to evaluate your financial habits and ensure this move aligns with your long-term goals. Our team at Delmar Mortgage is here to help you navigate your options and find the best solution for your situation judgment-free. Try using our refinance calculator to gauge where you’re at in your financial journey, or apply for time with a loan officer today if you’re ready to take the next step!
Why work with Delmar Mortgage?
At Delmar Mortgage, we understand the complexities of refinancing and are committed to helping you make informed decisions. As a third-generation family-owned company we place the customer experience at the forefront of all that we do. Our experienced team is dedicated to your financial health and will work with you to find a refinancing solution that fits your needs. Reach out to us today to start your journey towards financial stability and independence.Â
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