How debt consolidation works
The goal of debt consolidation is to lower your monthly payments and increase your monthly cash flow. With a cash-out refinance, your new mortgage pays off your existing mortgage plus the debts you choose to consolidate. Instead of four or five due dates and interest rates, you have one predictable payment, usually at a far lower rate than credit cards charge.
Our loan specialists build a custom consolidation plan around your budget. We look at every balance, rate and payment, then show you exactly how your monthly cash flow changes and what the trade-offs are.
Weighing the trade-offs honestly
| Feature | Benefits | Things to consider |
|---|---|---|
| Monthly budget | One lower payment, more cash flow | Requires discipline not to rebuild card balances |
| Interest rate | Mortgage rates are usually much lower than card rates | A longer term can raise total interest paid |
| Security | Fixed, predictable payment | Unsecured debt becomes secured by your home |
| Credit | Paid-off cards can lower your utilization | Closing costs apply to the refinance |
Debt consolidation may fit you if
- You have meaningful equity in your Iowa home
- Your debts carry rates well above today's mortgage rates
- You want one predictable payment and better monthly cash flow
- You have a plan to keep card balances low after closing
