I have some credit card debt on a few diffrent cards. I'm getting tired of trying to keep track of when they are due and paying the high rates. I have owned my home for over a year and a half, and I was looking at and Home Equity Loan, which it appears the APR is at 7% with most banks. Would it be worth getting to pay off my credit cards? And, If I wanted to sell my home, would there be any probelm with having the loan?
2007-03-05 03:31:36 · 10 answers · asked by plowboy 2 in Business & Finance ➔ Credit
You could get a home equity loan if you have enough equity in the house.
The bank will do an appraisal on your house to determine the value. Subtract your current mortgage amount. What's left is the approximate equity. However, they usually won't give you the total amount in an equity loan as you would have 100% financing and most banks don't want to do that on an equity loan.
The interest on Home Equity loans is tax deductible, just like your mortgage loan (one of the advantages of a home equity loan). When you sell the house, the Home Equity loan would have to be satisfied, just like your mortgage loan.
If your mortgage loan was $100,000 and your Home equity loan was $50,000 and you sold the house for $175,000, you'd net $25,000, less commissions and other expenses of the sale if the house sold.
Your mortgage company has a 1st lien, meaning they would be paid first in a sale. The home equity loan will put another lien on your house, a 2nd lien, meaning they will get paid next. You get the rest.
2007-03-05 03:42:10 · answer #1 · answered by Faye H 6 · 0⤊ 0⤋
You may be interested in this new program. It works well with a 30, 20, or 15 year mortgage. I am currently using a HELOC (home equity line of credit) with a new software program that helps build equity fast, and will payoff my home and other loans in less than half the time without refinancing, and without extra payments. It is saving me thousands in interest, and pays off home in less than half the years. Those who take an honest look at all the facts and figures from a reputable source will find that this system truly creates a significant advantage for homeowners. E-mail me if interested.
2007-03-06 00:00:22 · answer #2 · answered by marshae 1 · 0⤊ 0⤋
First off, you will lose equity in your home. This becomes a big deal if you need to sell, or if the home values drop. Second, you are taking a short term debt and making it long term. However, this may still be beneficial overall, depending on cash flow, long term plans, equity position in the home, and a host of other factors. It is up to you to sit down and determine what is best for you. I suggest you go to the link I provided in the source and find the article most suited to you.
2016-03-29 00:50:59 · answer #3 · answered by Anonymous · 0⤊ 0⤋
The Home Equity Loan is a rapid method of reducing huge credit card debt, funding college education as well as vacation expenses. As the stock market has gone down from its previous high, people have resorted to buying homes as a type of investment. This has resulted in escalation of housing prices. These higher prices have resulted in escalation in the value of the home. This has proved beneficial to people mired in debt, who can repay the debt with a home equity loan. Home Equity Loans have provided succor and flexibility to help the homeowner eliminate debt and improve their financial situation.
2007-03-05 23:59:00 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Yes, it is worth it. For one thing you will save money on interest and you can write off the interest paid on a home equity loan on your taxes.
I did the same thing a couple of years ago and it saved me over $600.00 a month. Just be sure not to take the loan out for a long period. Nothing ove 5-years.
If you sell your home? The home equity loan will have to be paid off from your profit.
2007-03-05 03:36:43 · answer #5 · answered by ? 7 · 0⤊ 0⤋
DON'T !!! YOu need to get rid of the credit cards and the debt. A HEL just shifts the debt to another payment without addressing the real problem. YOU NEED TO MANAGE YOUR DEBT.
I recommend Dave Ramsey's book The Total Money Makeover to assist you in budgeting and managing your debt and the root cause.
Good Luck
2007-03-05 03:37:29 · answer #6 · answered by snvffy 7 · 0⤊ 0⤋
It depends on the numbers - how much would the interest rate be on the HELOC, and how much are you paying now Find out rates at http://www.anrdoezrs.net/click-1995821-10400648. But here's the thing - don't take out a loan and run up more debt.
2007-03-05 04:14:19 · answer #7 · answered by Byron W 3 · 0⤊ 0⤋
I speak from experience when I say DON'T do it! HELOCs are like snowballs that from month to month get bigger and bigger and bigger... Before I knew it, my balance was double what I had spent to pay my debts. I had to refinance just to get rid of the HELOC because I couldn't stomach it getting so out of control. Seriously, do not do it. If you need to consolidate, get a personal loan with a set monthly payment at least this way its more managable.
2007-03-05 03:42:58 · answer #8 · answered by CupCake 5 · 0⤊ 0⤋
dont do it. dont put your house on the line.
first you need to cut up all the credit cards.
sit down and do a written budget. you can find the money and pay of the smallest debt first and then the next smallest and so on.
2007-03-05 03:49:07 · answer #9 · answered by heybulldog 5 · 0⤊ 0⤋
hmm, I am not sure if this could help but I have this resource and it helps a lot when faced with credit and loans difficulties
all the best, I know you'll get through it all
Stay safe
2007-03-05 03:39:59 · answer #10 · answered by Anonymous · 0⤊ 1⤋