How it works
If you have home equity, you can use a cash-out refinance or HELOC to pay off high-interest debts. Your credit cards charge 18-29%. Your mortgage charges 6%. Moving debt from the credit cards to the mortgage can save $500-$1,500/month.
The math that changes lives
Example: $25,000 in credit card debt at 22% = $655/month minimum payment, $5,500/year in interest alone. Move that to a 6% mortgage and the payment drops to $150/month, interest drops to $1,500/year. You save $500/month cash flow and $4,000/year in interest.
Two ways to consolidate
- Cash-out refinance — one lump sum, fixed rate, replaces your first mortgage. Best when you need all the money at once.
- HELOC — revolving line of credit, variable rate, sits behind your first mortgage. Best when you want flexibility.
We run both options and show you which saves more — call us.
Risks to understand
Debt consolidation converts unsecured debt (credit cards) into secured debt (mortgage). If you don't change spending habits, you could run the cards back up AND have a bigger mortgage. We recommend a plan to close the cards or keep balances at zero going forward.
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