Debt Consolidation

Cash-Out Refinance for Debt Consolidation:
Replace High-Interest Debt With Mortgage Rates

Use your home equity to pay off credit cards, personal loans, and medical bills — replacing 18-29% interest rates with today's mortgage rates. One monthly payment. Potentially tax-deductible interest. Dream Financial Management since 1994.

How Cash-Out Refinance Debt Consolidation Works

Before: High-Interest Debt

Debt Balance Rate Monthly
Credit Card 1 $25,000 24.99% $625
Credit Card 2 $15,000 22.99% $345
Personal Loan $20,000 15.00% $475
Medical Debt $10,000 0%* $250
TOTAL $70,000 ~21% avg $1,695

After: Cash-Out Refinance

Item Amount
Existing Mortgage $250,000
Debt Consolidation $70,000
New Mortgage Total $320,000
New Rate 6.5%
New Payment (P&I) $2,022
Monthly Savings $250-600+

*Medical debt often has 0% promotional rates that expire. Calculated for illustrative purposes. Actual savings depend on your specific rates and situation.

Benefits of Consolidating Debt With a Cash-Out Refinance

Lower Interest Rate

Replace 18-29% credit card APR with today's mortgage rates (6-7% range). Over a 30-year term, this saves tens of thousands — even if you pay the mortgage over the full term.

One Monthly Payment

Instead of juggling 4-6 minimum payments on different cards and loans, you make one mortgage payment. Simpler budgeting, fewer late fees, less stress.

Potentially Tax-Deductible Interest

Mortgage interest on loans up to $750,000 for acquisition debt is tax-deductible. The consolidated debt portion should be discussed with a tax professional for deductibility analysis.

Credit Score Improvement

Paying off revolving credit card balances can significantly improve your credit utilization ratio — a major factor in your credit score. Many borrowers see 20-50+ point improvements.

Consolidate Debt With Home Equity — Free Consultation

Dream Financial Management evaluates your debt situation and home equity to determine if a cash-out refinance makes sense for debt consolidation. 500+ lenders. Since 1994.

Check Debt Consolidation Options — Free