I own $45,000.00 in credit card debts.
I'm worried to get the Equity with less rate because ones they start to go up I can end up paying a lot; at the same time I don't want to get the Equity with higher rate because even though it's a fix rate I will still pay more than I can bargain.
Often it can make sense to pay off credit card debt with a home equity loan. You usually pay a lower interest rate on a home equity loan than on a credit card, and your interest payments on a home equity loan are tax-deductible up to a loan of $100,000. However, if you cannot afford the payments on a home equity loan, it may be better that you talk to the credit card company and try to work with them. For all you know, the credit card company may give you a lower rate or adjust your balance. (You may want to work with a debt counselor. For a list of debt counselors maintained by various state governments go to http://www.vilkri.com/pubreader.php?page=debt_counselor .) The problem with a home equity loan is that you can put owning your home into jeopardy if you do not make the required payments.
Want to consolidate my debt to make one payment .Should I get a Home Equity Line or Loan of credit?
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May 6th, 2008 at 9:09 am
Do you have $45,000 equity in your house? I would recommend a home equity loan instead of a line of credit because a loan is for a set amount, for a set term. If you do get this home equity loan and pay off your credit cards then by all means, cut them up and don't use them anymore or you'll charge them back up and end up owing credit cards and the home equity loan both.
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May 6th, 2008 at 9:24 am
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May 6th, 2008 at 10:33 am
Often it can make sense to pay off credit card debt with a home equity loan. You usually pay a lower interest rate on a home equity loan than on a credit card, and your interest payments on a home equity loan are tax-deductible up to a loan of $100,000. However, if you cannot afford the payments on a home equity loan, it may be better that you talk to the credit card company and try to work with them. For all you know, the credit card company may give you a lower rate or adjust your balance. (You may want to work with a debt counselor. For a list of debt counselors maintained by various state governments go to http://www.vilkri.com/pubreader.php?page=debt_counselor .) The problem with a home equity loan is that you can put owning your home into jeopardy if you do not make the required payments.
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May 6th, 2008 at 11:00 am
I wish my advice could be helpful.And here is a good resource.Check it up.http://homeloan.online-assistant.info/home-improvement-loan-mn.html
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May 6th, 2008 at 12:42 pm
Usually you want to avoid rolling your unsecured debts into secured debts. This is because if your income reduces and you are unable to pay for the HELOC or loan, you are now in danger of foreclosing on your home.
Your best option would probably be to check out a Debt Management Program, like that of GreenPath Debt Solutions. They will try to work out lowered monthly payments and lowered interest rates with your creditors and you would make one payment to them per month and they would send out that money to each of your creditors. It usually takes about 5 years to complete the program, a lot less time than it will take you to pay off the Home Equity you would be getting. Check out their website at http://www.greenpath.com. Good luck!
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