March 2nd, 2018
It’s true that mortgage rates are steadily increasing but there is no need to panic. Current rates are still considered historically low and now is the perfect time to take advantage of a low-cost VA loan to lower your monthly payment and consolidate debt.
VA loans typically have lower rates than conventional loans so even with rising rates you might still be in a position to lower your monthly payment. VA loans also have the advantage of allowing a 100% cash out refinance. You can consolidate your first and second mortgages as well as any revolving debt.
Debt consolidation is a finance strategy that rolls high-interest debts like credit cards and car payments into a single, lower-interest payment. This can lower your monthly payment burden and reduce financial stress. Loans like cash out refinances which are secured by real estate almost always have much lower interest rates than unsecured debt like credit cards. Lowering your “credit utilization ratio” also helps your credit score. Utilization is the percentage of your credit card limits that you are using at any given time. Paying off all of your unsecured debt drops your utilization to zero, while adding that amount to your home mortgage will not hurt your credit score.
If you have consumer debt and you’re only making minimum monthly payments, consolidating might be a better financial solution.
After consolidating, be aware of making the same mistakes over again. Analyze lifestyle choices that led you to acquire the debt in the first place. Think twice before opening new lines of credit and charging up new balances.
Don’t let the rate hike worry you, if cash out refinancing and debt consolidation make financial sense to you, look into the advantages of a government secured VA loan today.