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If you are in debt and have high credit card bills, you may want to consolidate your debt. Consolidating your debt by refinancing your home lowers your monthly payments and allows you to put the money you save towards paying off high-interest debt, such as credit card bills. Consolidating you debt into your home loan will also reduce interest payments on your total debt.
Mortgage interest rates are much lower than credit card or unsecured loan rates. Consolidating your debt with a refinanced mortgage or home equity will reduce your payments simply by having a lower rate. By paying the same monthly payments, you can pay off your debt rapidly.
Your interest is also tax deductible with a mortgage or home equity loan, where your credit card interest isn't. Student loan interest is also tax deductible and shouldn't be consolidated for a higher rate.
Consolidating with a loan also allows you to reduce your payments by picking longer terms. So if your income is reduced or you have other financial obligations, lengthening your payments can give you some breathing room in your budget.
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