debt

Introduction

Debt consolidation through mortgage refinancing is a powerful tool that can help homeowners reduce financial stress and save money. If you have high-interest credit card balances, personal loans, or auto loans, rolling them into your mortgage can lower your total monthly payments and free up extra cash each month.

At Ross Mortgage, we know that refinancing is a big decision, and you likely have questions about how it works. Below, we’ve answered some of the most common questions homeowners ask about debt consolidation refinancing to help you make an informed decision.

1. What is debt consolidation refinancing?

Debt consolidation refinancing allows homeowners to use their home equity to pay off high-interest debt—such as credit cards, personal loans, or auto loans—by rolling those balances into a new mortgage with a lower interest rate. This results in one single payment instead of juggling multiple high-interest debts.

By securing your debt under a lower-rate mortgage, you can reduce your overall interest costs and free up more money each month for savings, home improvements, or other financial goals.

2. Will my monthly mortgage payment go up?

In some cases, your mortgage payment may increase because you’re borrowing more than your previous loan balance. However, your total monthly payments—including what you were paying for credit cards, auto loans, or personal loans—will likely decrease.

For example, let’s compare two scenarios:

Before Refinancing:

  • Mortgage Payment: $1,194
  • Personal Loan Payment: $734
  • Auto Loan Payment: $521
  • Total Monthly Payments: $2,449

After Refinancing (New Mortgage at 6.5% Interest):

  • New Mortgage Payment (Consolidated Debt): $1,957
  • Total Monthly Savings: $492 per month

Even though the mortgage payment is higher, the homeowner is saving nearly $500 each month, reducing stress and improving financial flexibility.

3. What’s the biggest benefit of debt consolidation refinancing?

The biggest benefit is monthly savings and financial relief. By consolidating high-interest debts into a lower-rate mortgage, homeowners often:
✔ Lower their total monthly payments
✔ Reduce their overall interest costs
✔ Gain more financial stability and flexibility

This extra cash flow can be used to build an emergency fund, pay down debt faster, or invest in long-term financial goals—helping homeowners work toward financial freedom.

4. Are there risks to consolidating debt into my mortgage?

While refinancing has many benefits, it’s important to understand that you’re converting unsecured debt (like credit cards) into secured debt (your mortgage).

This means your home is being used as collateral, so it’s important to budget carefully to avoid financial strain. However, if used wisely, debt consolidation can be a highly effective strategy for reducing debt and creating long-term financial stability.

5. How does this affect my credit score?

Refinancing can actually help your credit score in the long run by:

  • Reducing credit utilization (since credit card balances are paid off).
  • Improving debt-to-income ratio, which is a key factor in credit scoring.

However, keep in mind that applying for a refinance will result in a temporary dip in your credit score due to the lender’s inquiry.

6. What fees are associated with refinancing?

Refinancing typically includes closing costs that range from 2% to 5% of the loan amount. These costs cover lender fees, an appraisal, and title insurance.

At Ross Mortgage, we provide transparent pricing, so you know exactly what to expect before moving forward with refinancing.

7. Can I consolidate multiple types of debt into one loan?

Yes! Homeowners can use a cash-out refinance to consolidate multiple types of debt, including:
✔️ Credit card balances
✔️ Personal loans
✔️ Auto loans
✔️ Medical bills
✔️ Student loans

Rolling multiple payments into one manageable mortgage payment simplifies your finances and helps you avoid high-interest costs.

Why Choose Ross Mortgage?

At Ross Mortgage, we’ve been helping homeowners refinance and achieve financial freedom for over 75 years. Our experienced loan officers provide personalized guidance to ensure you get the best refinancing solution tailored to your needs.

We take pride in offering:
✔ Competitive interest rates
✔ A smooth refinancing process
✔ Expert guidance from start to finish

We’re committed to helping you make informed financial decisions that will improve your long-term stability.

Take Control of Your Finances Today

If you’re considering consolidating your high-interest debt through refinancing, now is the time to explore your options. Use our Debt Eliminator Calculator to get started and a trusted Ross Mortgage loan officer will reach out to discuss a personalized plan. Together, we’ll help you regain control and create a brighter financial future.

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