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If You’re Looking at Refinancing Your Mortgage to Pay Off Debt, there May Be a Better Option Ahead of You

Sometimes, it can feel like debt is overwhelming. Credit card debt, car payments, lingering student loans, lines of credit, business loans… the list goes on and on. With so many sources of debt and so many different deadlines or schedules for repayment, it can sometimes feel like refinancing your mortgage to pay off debt is the best, or even only, option. True, capitalizing on your home equity is a quick way to access large amounts of money, and having all your debt in one place can seem like a more straightforward path to paying off your personal debt. However, there are risks associated with refinancing your mortgage or with taking out a second mortgage that make it an unwise choice for most people. It is far better to find a way to get organized, assess your personal financial status and tackle the problem of debt head-on. Sometimes, all it takes is a more organized and tactical approach, and what used to seem like insurmountable debt problems can suddenly reveal themselves as quite manageable.

Great – but How?

"Take control of your personal finances” is all well and good, and it’s undoubtedly good advice, but like many pieces of advice, it’s often easier said than done. Most people don’t have any sort of accounting background, and the tricks of the personal finance trade can seem complicated and technical to the lay person. Luckily, technology can help. By using personal budget planning software, getting a good look at your entire household budget is easy. Follow the prompts, input your expenses and income, and watch the software come up with a clear, concise overview of your financial situation. Once you have that good look, you’ll be able to spot the places where your own spending habits are undermining your goals, and see where you can simply save the money you’re already making rather than sinking deeper into debt when you don’t need to.

Nickel and Diming Yourself

While it’s obviously true that remortgaging your home will release a large amount of cash in short order, you may be surprised by how much money you can find by making much smaller, and safer, decisions. A robust piece of personal account manager software will let you pose various hypothetical questions about your finances to see just how much you can save in the long run by making minor adjustments to your day-to-day spending habits. By finding ways to save just a few dollars every day, you can soon see just how much more room to breathe you had in your monthly personal budget, and how paying off some of your debts is not as out of reach as you once thought.
With the right personal accounting software helping you, you can take total control over your finances, set personal budget goals, develop a plan and work towards living debt-free, all without having to resort to refinancing your mortgage in order to pay off debt. You’ll get the peace of mind of paying off your debts and knowing that your hard-earned home equity is safe and sound. Your home equity is far better being preserved instead of consumed.