How to Refinance My Mortgage to Consolidate My Bills

Refinancing a mortgage for debt consolidation enables you to combine a first and second mortgage or a home equity loan into one fixed-rate mortgage with a set lower payment for the entire term of the loan. According to Bills.com, consolidation does not only help lower payments, but it can reduce interest rates and ensure you do not miss out on any potential tax breaks. There are a few steps to take to refinance your mortgage for debt consolidation.

Instructions

1

Calculate the balances of all the loans that you are considering consolidating. In other words, total the amount you owe on all of the loans that you want to combine to have one payment.

2

Perform some research to find out how much your home is currently worth on the open market. This value is important because it is how much your house would be worth to the bank and it will help establish how much of a refinance that you will qualify for. According to Bills.com, if your total balance owed is less than 80 percent of the home's worth then you should be able to refinance. Further, Bills.com says a balance of more than 80 percent, but less than 100 percent could qualify you but it would likely be at a higher interest rate. If you owe more than 100 percent or you owe more than your home is worth, you are not likely to be approved for a refinance loan.

3

Apply for a refinance loan at two or three different banks. Bills.com suggests you review the rates, fees and costs carefully for each offer and make a decision about which bank offers the best options. The lowest interest rates and fees usually win out and saves you money.