Consolidating credit card debt into mortgage

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It’s possible to add the costs associated with getting a new mortgage into the total refinance amount to avoid paying anything out of pocket at closing.However, refinancing to get cash out or consolidate your debt may result in a longer loan term or a higher rate, and that might mean paying more in interest overall in the long run.The average credit card interest rate is around 15%.By comparison, mortgage rates are currently in the 3–4% range.If the current value of your home is greater than your current mortgage balance, it means you have equity in your home.You may be able to use this equity to refinance your current mortgage and receive cash at a low interest rate to pay off your credit card debt.

Getting rid of that expensive debt is a nice idea in theory, but finding the finances to do so can be difficult.

Therefore, the total equity in your home is 5,000 (minus the ,000 to ,000 in realtor’s fees and transfer taxes you would incur in selling).

This amount of money would pay off all of your debt.

The question: Should you refinance your house with a mortgage to pay this debt off?

Should you go further and refinance the entire loan into a lower interest rate, lowering your monthly payment and extracting money beyond what is needed to pay your debt?

Buying a new home when you have credit card debt is a big commitment; not paying off your credit card debt before taking out a mortgage may mean a lower credit score, making it difficult to get the best interest rates.

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