Do you feel like your life is on hold because you’re trapped by all your debt payments? Consolidating your debt could be the answer you’re looking for.It can help lower your monthly payments and get you out of debt faster so you can be in the driver’s seat of your own finances.
There are many variables at play here: interest rates, amortization, fees and penalties for your specific situation.
You may find the overall cost of borrowing to be higher or lower than your current situation. But the more important consideration is whether or not you will get back into the habit of spending more than you earn.
If that does happen, then what do you do the next time you've racked up too much debt? The vicious debt spiral can only be stopped once you master your monthly budget.
In this particular case, 0 was freed up in monthly cash flow and the refinanced mortgage interest rate was lower.
In many situations, however, consolidating debt into a mortgage comes at a cost: You must break your current mortgage and the high-interest debt then gets amortized into the new mortgage balance at a lower interest rate.