Mortgage Glossary
Debt Consolidation
Defined by Onias Derilus, Mortgage Capital · NMLS# 1859012 · Florida licensed mortgage broker
Debt consolidation is combining multiple debts into a single loan, often through a cash-out refinance that pays off higher-interest balances.
What Debt Consolidation means
Rolling credit cards or personal loans into your mortgage can lower your blended interest rate and monthly payment. That said, it stretches short-term debt over a long term and uses home equity.
Florida example
A Florida homeowner with $40,000 in 22% credit card debt does a cash-out refinance to pay it off at a 7% mortgage rate. Monthly cash flow improves, but they should avoid running the cards back up.
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