2 Powerful Strategies to Break Free from Debt

By Michael Durr

"Mike is a total pleasure to work with! Great lender who explains everything thoroughly and gets you into a product that works well for you. Highly recommended!!" - Tyler Tomek

Are you struggling to get out of debt? Now might be a good time to clear your debt since homes have appreciated and interest rates are dropping. There are two strategies that you can do to be debt-free: the Debt Snowball Method and Cash-Out Refinancing. Let’s discuss these two options and how you can get completely out of debt.

1. Debt snowball method. Popularized by Dave Ramsey, the Debt Snowball Method involves paying off your smallest debts first while making minimum payments on larger ones. I’ve used this method before, and while it requires a lot of diligence, it works, and it feels amazing when you’re finally out of debt. The downside is that it can take a long time and require a lot of discipline.

2. Cash-out refinancing. Now that interest rates have started to come down and homeowners have more equity in their houses, cash-out refinancing has become a more attractive option. This strategy involves refinancing your existing mortgage and taking out a portion of the equity in your home. You can then use the money to pay off high-interest debts.

There are several reasons why you should consider cash-out refinancing. First, it lets you clear out your debt in about four weeks. Second, by replacing high-interest credit card debt, which is around 20%, with a lower interest rate, currently between 5% and 6%, you can reduce your monthly payments, resulting in more monthly savings.

The best approach depends on your situation and financial goals, but the most important thing is getting out of debt, no matter how you choose to do it. If you want to clear out your debt faster, call me at (281) 348-9899. Let’s work out a strategy that makes sense for you.