What are the Pros and Cons of a Debt Consolidation Refinance

By June 20, 2019September 2nd, 2021No Comments
someone calculating and writing down notes

Coming at you with more information on Debt Consolidation

Cash Out Refinance, what’s up!!


Look, we have got to be careful It’s real easy to think,

“Hey, I’m going to save $300, $600, $800 a month”

It’s a good thing to do, but we have got to appreciate the pros and cons of things

and your actions after the refinance can completely take away the benefits of the “Refi”


Here is what I am thinking, I had a couple of school teachers

That I helped and they have sold their house

They were buying another, I had them pay off their cars

With some of the money and they took the savings

And invested it into a mutual fund for their future


That whole thing made sense, but what I was explaining to them was

If they are going to have a car payment again in the future.

And that is where debt consolidation refi can hurt you


So, if you pay off your car with your equity in your home

That’s fine and it saves you a bunch of money

But you have got to appreciate, you just took that car loan and wrapped it into 15, 20, 30 yr loan

Well, you are not going to keep you car 15, 20, 30 yrs..


So if rolling your car into your mortgage

took you from, maybe you raised your mortgage payment +$100 a month

But saved you a $600 car payment , so you have $500/month

That’s cool, but you have got to understand if 3, 5, 7, 10 yrs down the road

You are buying another car, you are still paying that $100/month in your mortgage

And therefore it’s starting to not really benefit you


So, when you are rolling debt into your house we have to be mindful of the current situation

but also how it could bite you down the road

Recurring debts like cars and stuff can get you into trouble

Same thing, we pay off a whole bunch of credit cards

and life happens and you run those credit cards back up

you just wasted your equity, we have to protect your equity

Here is what I recommend, we need to be very careful

About rolling things like your car payments

Regarding credit cards, if we are going to save you $300 or $500/month

Let’s have a conversation, I can put you in touch with a Financial Adviser

Let’s take that $300-$500/month and invest it and do something smart with it

because that’s where the benefits are


Wealthy people always tell you, making your money work for you

Is the key to wealth, you cannot earn enough income to be wealthy

It’s about making your money work for you, and I help people with that all the time


Im Scott DiGregorio, Your Mortgage Guy

I’ll catch you on the next video please reach out to me with any questions, take care.


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