There are many benefits associated with re-financing a home in Arizona. While there are always situations where re-financing is not the right decision, there are a host of benefits that can be realized from a refi under the right conditions. These benefits include:
- Debt Consolidation
- Lower Monthly Payments
- Utilization of Existing Home Equity
Anyone considering a refi in AZ should consider each of these alternatives in conjunction with their financial adviser to help them make the best decision.
Lower Your Monthly Payments
The possibility of lower monthly mortgage payments is a very appealing benefit and driver of re-financing. Many homeowners are in the situation of living paycheck-to-paycheck and for these folks, finding any opportunity to save money can be a big breakthrough. Homeowners that are successful in negotiating lower interest rates when they re-fi their homes will most likely see the benefits of lower monthly mortgage payments.
Debt Consolidation
Many AZ homeowners are starting to look at refinancing solely for the purpose of debt consolidation. This is especially helpful for those homeowners with high interest credit card debts and the like. Such a debt consolidation loan allows the homeowner to use the existing home equity they've established as collateral to secure a lower interest loan. This loan is often large enough to repay the existing balance on their home as well as cover their credit card debts, car loans, or any other higher interest debt.
When re-financing is undertaken with the purpose of debt consolidation, there is not always an increase in savings. Those who are looking to consolidate their debts are too often also struggling with monthly payments and just getting buy. This is an option that makes it easier to manage monthly bills at a lower overall rate. By consolidating the debt in one place, it will be easier to pay your monthly bills.
Using the Existing Equity in Your
Another popular reason for re-financing in AZ right now is to leverage the existing equity in your home. Arizona homeowners who have a considerable amount of equity in their home may find they are able to cash out some of this equity for other purposes that are important to them. This could include home improvements, starting a business, continuing their education, or even taking a vacation. The Arizona homeowner is not limited in how they can use the equity in their home and may re-finance their home equity line of credit which can be used for any purpose they deem necessary.
A home equity line of credit is different from a loan because the funds are not disbursed all at once. Rather the funds are made available to the Arizona homeowner and the homeowner can withdraw these finds at anytime during the draw period.
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