Buying a home and consolidating debt
Most people use it to pay off high-interest debt, fund a large purchase or finance a home improvement project.
Many people like to consolidate credit card debt using a cash-out refinance because they can make fixed payments on it over a set period of time, rather than paying a revolving balance every month.
You might not get a traditional mortgage loan while you're on a DMP, but you might have some alternatives to consider. And while our site doesn’t feature every company or financial product available on the market, we’re proud that the guidance we offer, the information we provide and the tools we create are objective, independent, straightforward –- and free. " You can trust that we maintain strict editorial integrity in our writing and assessments; however, we receive compensation when you click on links to products from our partners and get approved. IN THIS ARTICLE: Using low mortgage rates to consolidate debt Doing a cash-out refinance the right way Potential downsides of a cash-out refinance Next steps to refinance your mortgage Debt is a major problem for many American households — especially those that have credit card debt in addition to mortgages, auto loans and student loans. Many cardholders pay higher rates on higher balances. We believe everyone should be able to make financial decisions with confidence. This may influence which products we review and write about (and where those products appear on the site), but it in no way affects our recommendations or advice, which are grounded in thousands of hours of research. We're on your side, even if it means we don't make a cent. households carry an average of ,762 in credit card debt, and in 2015, they paid an average interest rate of 13.66% on it.This is because credit card debt is perceived as riskier than mortgage debt, and credit card companies charge interest accordingly.But if you can move debt that costs you 13.66% to a vehicle that charges you only 3.71%, you can effectively give yourself almost a 10% return on your money.