Financing strategy · Refinance
Debt Consolidation
Debt consolidation uses a cash out refinance, HELOC or second mortgage to pay off credit cards, personal loans or other higher rate balances. The tradeoff is straightforward: monthly cash flow usually improves, but unsecured debt becomes secured by your home and may be repaid over a longer period.
Who it is designed for
- Homeowners carrying revolving balances at high rates
- Homeowners with equity and consistent income
- Homeowners who have addressed the reason the balances accumulated
Eligible occupancy types
- Primary residence
- Second home
- Investment property depending on the program
Down payment or equity
Not applicable. Available funds depend on equity and program limits.
Major benefits
- One payment instead of several
- Monthly cash flow often improves
- Mortgage interest may be treated differently than consumer interest for tax purposes; consult your tax advisor
Important considerations
- Unsecured debt becomes secured by your home
- Stretching short term debt over 30 years can increase total interest
- Consolidation does not address spending patterns
- Closing costs apply
How qualification generally works
- Sufficient equity after payoff of the consolidated debts
- Income and credit review
- Appraisal on the subject property
Documents commonly requested
- Photo ID and Social Security number for each borrower
- Most recent pay stubs covering a full 30 day period, if you receive W2 wages
- W2s and/or federal tax returns for the most recent years requested
- Two months of asset statements for accounts used for down payment and reserves
- Current mortgage statement, homeowners insurance and property tax information on properties you own
- Explanations for large or non payroll deposits
- Current statements for each debt to be paid off
Frequently Asked Questions
Related programs and next steps
Cash Out Refinance
Replace your mortgage with a larger one and take the difference in cash.
Learn more Home EquityHELOC
A revolving line of credit secured by the equity in your home.
Learn more Home EquityUltimate HELOC
An all in one line of credit used as both a checking hub and a mortgage payoff tool.
Learn moreConsidering debt consolidation?
We will review your documents, compare the realistic options, and give you a written preapproval you can use with confidence. Nothing on this page is a commitment to lend.