Most home mortgage refinances allow consumers to borrow up to 80% of the value of their home. Let's say John was trying to refinance his mortgage. John would be able to borrow up to $80,000 (80% of $100,000). If he refinanced his mortgage, John could pay the balance that he owed on his old mortgage ($55,000) and use the remaining available equity ($25,000), to pay off his credit cards ($15,000) and car ($10,000).

Using the same figures as the previous paragraph, let's say John could refinance at 7.5% as opposed to the 9% that he is currently paying. Not only would John be able to save 1.5% (9%-7.5%) on the balance that he rewrote on his mortgage, he would be able to save 11.5% interest (19%-7.5%) by paying off his credit cards. Additionally, he would save 2.5% interest (10%-7.5%) on his car.

John's total monthly expenditures before the rewrite are as follows:

*John will save $795.63 in monthly expenditures

Choose from the links below to learn more about mortgage refinancing:

• Second Mortgage
• Over-Equity Loans
• Important Factors to Account for When Considering a Home Equity Loan