debt consolidation
Debt Consolidation Refinance: Use Home Equity to Pay Off High-Interest Debt
A debt consolidation refinance may allow homeowners to use built-up home equity to pay off high-interest debt, such as credit cards, personal loans, or other monthly obligations.
Andes Mortgage can help you compare a cash-out refinance, HELOC, or Home Equity Loan to see which option makes the most sense for your situation.
100% secured. No impact to your credit scores.
Debt consolidation snapshot
Pay off high interest credit cards, personal loans and other debts.
Replace multiple payments with one structured loan strategy
Cash-out refinance, HELOC or Home Equity Loan
Lower rates compare to any other unsecured debt
What a debt consolidation strategy can help you do
Access home equity
Use your home equity to eliminiate credit cards, personal loans or other expensive debt.
consolidate debt
Combined multiple debt outlays into one single manageable payment and interest rate.
Compare Equity Options
See whether a cash-out refinance, a HELOC or HELOAN works best for you.
one mortgage payment
The right strategy may help reduce monthly debt payments and create more breathing room.
how much equity could you use to consolidate debt?
Homeowners can estimate how much available equity may be available before exploring a cash out refinance, HELOC or Home Equity Loan to pay off high interest debt.
Estimate usable home equity
Compare equity vs your unsecured debt
See which option may fit best
Available Equity Calculator
Estimates only. Actual loan limits depend on credit, income, appraisal, equity, and program guidelines.
EQUITY ACCESS OPTIONS COMPARED
Cash-Out Refinance vs HELOC vs HELOAN
|
Option
|
Best For
|
Rate Type
|
Payment Structure
|
Keeps Current Mortgage
|
Access Funds As Needed
|
|---|---|---|---|---|---|
|
Cash-Out Refinance
|
Large expenses, debt consolidation
|
Fixed or Variable
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Fixed principal & interest payments
|
❌ No
|
❌ No
|
|
HELOC
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Flexibility, revolving line, on going expenses
|
Variable
|
Interest-only during draw period
|
✅ Yes
|
✅ Yes
|
|
HELOAN
|
One time expenses, fixed rate & payments
|
Fixed
|
Principal & interest payments
|
✅ Yes
|
❌ No
|
How does a debt consolidation refinance work?
A debt consolidation refinance uses available home equity to help you pay off qualifying debts. Andes Mortgage helps you compare whether restructuring debt through your mortgage or a second mortgage makes sense.
Review current debts
Credit cards, personal loans, auto loans, or other monthly obligations.
Check available equity
Estimate how much usable equity may be available based on your home value and your balance.
Compare loan options
Cash-out refinance, HELOC and Home Equity Loan structures can all work differently.
Choose a strategy
Focus on payment, total interest, long-term goals and whether your first mortgage should stay untouched.
Andes mortgage helps you
cash out refinance
Best when replacing the first mortgage makes sense.
HELOC
Best when you want a flexible credit line and you want to access it anytime.
Home Equity Loan
Best for when you don’t want to refinance but want the certainty of fixed monthly payments.
How does debt consolidation refinancing work?
A debt consolidation refinance allows homeowners to use available home equity to pay off high-interest debts, such as credit cards, personal loans, medical bills, or other monthly obligations. Instead of managing several separate payments, the goal is to create a clearer payoff strategy that may improve monthly cash flow.
For some homeowners, a cash-out refinance may make sense because it replaces the current mortgage with a new loan and provides cash at closing. For others, keeping the current first mortgage and using a HELOC or Home Equity Loan may be the smarter option, especially if their existing mortgage rate is low.
The right strategy depends on your home equity, current mortgage rate, credit profile, income, debt amount, and long-term goals. Andes Mortgage can help you compare your options before deciding whether debt consolidation through home equity is the right move.
Compare Your Debt Consolidation Options
Use your equity strategically without guessing which loan type fits best
✅ Cash-out refinance if replacing your current mortgage makes sense
✅ HELOC if you want flexible access to equity while keeping your first mortgage
✅ Home Equity Loan if you want a fixed second mortgage with predictable payments
✅ Review monthly payment, total interest, and repayment term before deciding
✅ See whether debt consolidation may improve your monthly cash flow
Compare Refinance rates
Get an idea of what rates look like for a cash out refinance today.
We compare rates from 40+ lenders to find competitive options that fit your needs. You’ll get expert guidance, personalized solutions, and a partner who works for you.
why work with a mortgage broker?
We compare rates from 40+ lenders to find competitive options that fit your needs. You’ll get expert guidance, personalized solutions, and a partner who works for you.
related resources
current HELOC interest rates
Compare interest rates for home equity lines of credit.
Cash-Out Refinance Calculator
Calculate your house payments with a cash-out refinance.
Home Equity Loans (HELOAN)
Explore our second-lien HELOANs with a fixed rate and monthly payments.
refinance calculator
Calculate your house payment with a cash out refinance.
Frequently asked questions
What is a cash out refinance?
A cash-out refinance replaces your current mortgage with a new, larger mortgage. The difference between your new loan amount and your existing mortgage payoff is given to you in cash, after closing costs.
How does a cash out refinance work?
With a cash-out refinance, you apply for a new mortgage based on your home’s value, current loan balance, credit profile, income, and available equity. If approved, the new loan pays off your existing mortgage, and the remaining available funds are paid to you at closing.
What can I use a cash out refinance for?
Many homeowners use cash-out refinance funds for debt consolidation, home improvements, purchase another property including investment, business expenses, emergency reserves, education costs, or other major financial goals. The best use depends on your overall financial situation.
Is a cash out refinance the same as a HELOC?
No. A cash-out refinance replaces your existing first mortgage with a new mortgage. A HELOC is a separate second mortgage that gives you access to a revolving line of credit while keeping your current first mortgage in place.
What is the difference between a cash out refinance and a HELOAN?
A cash-out refinance replaces your current mortgage with a new first mortgage. A home equity loan is typically a separate second mortgage that provides a lump sum of money with fixed payments, while leaving your original first mortgage untouched.
Is a cash out refinance better than a HELOC?
It depends. A cash-out refinance may be better if you want one mortgage payment, need a larger lump sum, or can improve your overall loan terms. A HELOC may be better if you already have a low mortgage rate and do not want to replace your first mortgage.
Should I do a cash-out refinance if I have a low mortgage rate?
It depends. If your current mortgage rate is much lower than today’s available rates, replacing your first mortgage may increase your payment or long-term interest cost. In that case, comparing a HELOC or Home Equity Loan may make more sense.
How much cash can I get from a cash out refinance?
The amount you can receive depends on your home value, current mortgage balance, loan program, credit score, occupancy type, and loan-to-value limits. In general, the more equity you have, the more cash you may be able to access.
Do I need an appraisal for a cash out refinance?
In most cases, yes. The lender usually needs to confirm your home’s current value to determine how much equity is available. Some loan programs may offer appraisal waivers if you are leaving a large percentage of equity untapped but that depends on the lender’s underwriting systems.
What credit score do I need for a cash out refinance?
Credit score requirements depend on the loan program, lender, property type, and overall file strength. Conventional, FHA, VA, jumbo, and Non-QM cash-out refinance options may all have different credit score guidelines.
At Andes Mortgage, we can do cash out refinances with credit scores as low as 520.
Can I use a cash out refinance to pay off debt?
Yes. Many homeowners use a cash-out refinance for debt consolidation, especially when paying off high-interest credit cards or personal loans.
Can I do a cash out refinance on an investment property?
Yes, cash-out refinance options are available for investment properties. At Andes Mortgage, we can help you get up to 75% LTV for investment properties.
Are cash out refinance rates higher than regular refinances?
Cash-out refinance rates can sometimes be higher than rate-and-term refinance rates because the borrower is increasing the loan amount and accessing equity. The final rate depends on credit score, equity, property type, loan program, occupancy, and market conditions.
Are there any closing costs with a cash out refinance?
Yes. Cash-out refinances usually have closing costs, which may include lender fees, title fees, appraisal fees, recording fees, prepaid taxes, insurance, and other transaction costs. In most cases, costs can be rolled into the new loan amount.
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