DEBT CONSOLIDATION
Your mortgage is almost certainly the cheapest money you will ever borrow. Credit cards and personal loans are the most expensive. Moving balances from the second column to the first can free up hundreds a month — but it converts unsecured debt into debt secured by your house, and that deserves a straight conversation.
We will tell you if the answer is no.
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The arithmetic is usually compelling. The judgement around it is what actually determines whether this works.
Credit card interest runs at a multiple of any mortgage rate. Consolidating a meaningful balance frequently changes the monthly outgoing by hundreds of dollars.
Five due dates across five statements is how good borrowers end up with a late payment. One mortgage payment is simply harder to get wrong.
Freed-up monthly cash flow is what turns a tight household budget into a functioning one — provided it goes somewhere deliberate rather than being absorbed.
Homeowners across the Tri-Cities who bought before the recent run-up frequently have far more equity than they realise. Why homeowners need a debt manager, not just a lender.
This is the product where the incentives are worst aligned. A lender paid on loan volume has every reason to consolidate you and not ask the awkward question.
The Arrowood Team offers a $5,000 Closing Guarantee. After a fully underwritten pre-approval we can issue a guarantee certificate, and if the loan does not close, Tim pays $1,000 to the borrower and $4,000 to the seller. Eligibility depends on the transaction — ask us whether it applies to yours, or read the full terms on our Closing Guarantee page.
The national average purchase closes in about 45 days. Our process targets 21 to 30, which is often the difference between winning a house and coming second.
We are at 119 Boone Ridge Dr in Johnson City. Tim Arrowood (NMLS #393468) personally works your file — no transferred queues, no loan officer who has moved on by underwriting.
The awkward question is whether the balances come back. If they do, you now have the cards again and a bigger mortgage. We will raise it, we will look at the pattern honestly with you, and sometimes we will recommend against doing this at all.
Consolidation is not one product, and the right structure depends on your current rate.
Replace the mortgage with a larger one and pay the debts off at closing. Cleanest option when your current rate is not far below market. How cash-out works in Johnson City.
If you are sitting on a very low rate, replacing it can cost more than the consolidation saves. This is the “golden handcuffs” problem and it needs the numbers run both ways. The golden handcuffs question.
Use the freed-up cash flow to take a shorter term rather than a lower payment. Same monthly outgoing, dramatically less total interest, and the debt is genuinely gone rather than stretched across thirty years.
Clear only the worst-rate balances and leave the rest. Often the better answer when full consolidation would push you past a loan-to-value threshold.
Equity has moved. Homeowners in Johnson City, Kingsport and Bristol who bought before the last few years of appreciation are often carrying substantial equity without having thought about it. That is what makes consolidation possible where it would not have been.
The appraisal decides. How much you can access is set by appraised value, and comparable sales vary considerably between the towns here. We would rather give you a realistic expectation than a hopeful one.
Not everyone should do this. If you are likely to move within a couple of years, or the underlying spending pattern has not changed, consolidating can leave you worse off. That advice is free and we give it regularly.
Underwritten as a new mortgage, because that is what it is.
Want the numbers before deciding anything? Call (423) 406-1567.
1. Is consolidating credit card debt into my mortgage a good idea?
Sometimes, and it depends far more on behaviour than on arithmetic. The math is usually favourable — you are trading very expensive unsecured debt for much cheaper secured debt. The risk is that the balances come back, and then you have both the cards and a larger mortgage. We will run the numbers and we will also ask what created the balances, because that is the part that actually determines whether this works.
2. Will this hurt my credit score?
Usually it helps, often significantly. Credit utilisation is a large component of your score, so paying revolving balances to zero tends to improve it. There is a small temporary dip from the new mortgage inquiry and account, but the utilisation improvement generally outweighs it within a few months.
3. What if I have a really low rate on my current mortgage?
Then this needs careful math and the answer is often no. Replacing a very low first mortgage to consolidate can cost more over time than the consolidation saves — the golden handcuffs problem. We run it both ways, including partial options, and we will tell you plainly if keeping your existing mortgage is the better outcome.
4. How much equity do I need?
For a conventional cash-out refinance, generally 20% remaining after the new loan. Given how much values have risen across the Tri-Cities, homeowners who bought several years ago frequently have more room than they expect. An appraisal establishes the actual number.
5. Do I get the cash, or do you pay the creditors?
In most cases the payoffs are disbursed directly to your creditors at closing. That is deliberate — it removes the gap where the money could go somewhere else, and it means the balances are genuinely cleared rather than intended to be.
6. Should I close the credit cards afterwards?
Not necessarily, and closing them can hurt your score by reducing available credit and shortening average account age. The better approach for most people is keeping one or two open and used lightly, and removing the temptation from the rest. This is worth thinking through properly rather than reacting to.
Tennessee: Johnson City, Kingsport, Bristol, Jonesborough, Elizabethton, Greeneville, Piney Flats and the surrounding Tri-Cities.
Virginia: Bristol and Southwest Virginia along the I-81 corridor.
Preferred Rate is licensed in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA and WI, and operates under American Pacific Mortgage in NV. The Arrowood Team originates primarily in Tennessee and Southwest Virginia.
119 Boone Ridge Dr, Suite 203
Johnson City, TN 37615
(423) 406-1567
arrowoodteam@preferredrate.com
Bring a list of your balances and rates. Fifteen minutes tells you what consolidating would actually save — or whether it would not.
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© 2024 American Pacific Mortgage Corporation. For informational purposes only. No guarantee of accuracy is expressed or implied. Programs shown may not include all options or pricing structures. Rates, terms, programs and underwriting policies subject to change without notice. This is not an offer to extend credit or a commitment to lend. All loans subject to underwriting approval. Some products may not be available in all states and restrictions may apply. Equal Housing Opportunity.
Refinancing may result in finance charges that may be higher over the life of the loan. Consult with your loan advisor for details.
Not available in New York. Licensed as Preferred Rate in AL, AZ, CA, CO, FL, GA, IL, IN, KS, KY, LA, MA, MD, MI, MO, MS, NC, OK, OR, TN, TX, VA, WA, and WI. Preferred Rate operates under American Pacific Mortgage in NV. AZ BK 1014819. CA #01215943. Regulated by the Colorado Division of Real Estate. Georgia Residential Mortgage Licensee. NV MB 164. Licensed under the Oregon Consumer Finance Act. OK MLO13426.
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The Department of Financial and Professional Regulation (Department) evaluates our performance in meeting the financial services needs of this community, including the needs of low-income to moderate-income households. The Department takes this evaluation into account when deciding on certain applications submitted by us for approval by the Department. Your involvement is encouraged. You may obtain a copy of our evaluation. You may also submit signed, written comments about our performance in meeting community financial services needs to the Department.” (Source: P.A. 101-657, eff. 3-23-21.)
CONSUMERS WISHING TO FILE A COMPLAINT AGAINST A COMPANY OR A RESIDENTIAL MORTGAGE LOAN ORIGINATOR SHOULD COMPLETE AND SEND A COMPLAINT FORM TO THE TEXAS DEPARTMENT OF SAVINGS AND MORTGAGE LENDING, 2601 NORTH LAMAR, SUITE 201, AUSTIN, TEXAS 78705. COMPLAINT FORMS AND INSTRUCTIONS MAY BE OBTAINED FROM THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV. A TOLL-FREE CONSUMER HOTLINE IS AVAILABLE AT 1-877-276-5550. THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV.”
THE DEPARTMENT MAINTAINS A RECOVERY FUND TO MAKE PAYMENTS OF CERTAIN ACTUAL OUT OF POCKET DAMAGES SUSTAINED BY BORROWERS CAUSED BY ACTS OF LICENSED RESIDENTIALMORTGAGE LOAN ORIGINATORS. A WRITTEN APPLICATION FOR REIMBURSEMENT FROM THE RECOVERY FUND MUST BE FILED WITH AND INVESTIGATED BY THE DEPARTMENT PRIOR TO THE PAYMENT OF A CLAIM. FOR MORE INFORMATION ABOUT THE RECOVERY FUND, PLEASE CONSULT THE DEPARTMENT’S WEBSITE AT WWW.SML.TEXAS.GOV
