Debt consolidating home equity mortgage

One consolidation option available to homeowners is a home equity line of credit.But what is a HELOC, and is it smart to use one to deal with your credit card debt?Credit card companies charge interest rates up to 25 percent on unpaid balances.

Credit card debts can snowball into an overwhelming pile.With high interest rates and the way balances are figured, it can be almost impossible to pay off big credit card debts a little at a time.Use your home equity line of credit or loan to finance a college education.Tapping into your home’s equity to pay for your tuition allows you to capitalize on the long-term benefits of higher education.Take a look at the details below to decide if this option is right for you.

Before discussing the benefits and drawbacks of using a HELOC to consolidate your credit card debt, it’s important to understand the ins and outs of this financial product.Combining ,000 worth of loans at 20 percent into a single loan at 9 percent will save you at least half the monthly interest, so you can pay more in order to reduce the balance.You can get a debt consolidation loan not secured by home equity but the interest rate usually will be higher because it is an unsecured loan.A home equity loan offers advantages over some other debt consolidation loans.While any loan that combines several debts into a single loan with one monthly payment is an improvement, the interest on a home equity loan can be deducted for income taxes, adding to your savings.This not only simplifies the payments, but can also provide real debt relief by reducing those payments as well.