Home Equity Loan
Home equity line of credit...what should I know before I apply?
Thinking about a HELOC for debt consolidation. Good idea or not?
Public Comments
- Home equity lines of credit are not fixed rates and that is the down side of them. The good side is the fact that if you take one out for $50,000, it is like a savings account in witch you can draw money from. Your payment is only based on the $ that you have taken out. There are many banks that will do a fixed second mortgage for you and that is your other option. You would get all the money up front, and have a consistant payment over a set period of time. I can gladly help you look at both options, depending on where you live. I work with over 115 lenders and can show you many ways to get the money you need. Let me know what state you live in please and I can see what can be done.
- Absolutely a great idea, if you get the right product, that is going to match your needs. So you should look at both HELOC and a total refi. Rate and Term are not the only factor in todays financing. Look at Interest Only programs as well as Option Arms as great ways to lower your payments all the while making your previous debt, tax deductible. Good luck in your journey.
- A HELOC can be a good tool for reducing your interest rate burden --- IF, you have the self-discipline to avoid running up debt elsewhere. The downside is that if you are unable to make your payments, you've put your shelter at risk and it's not fun to sleep on a bench. Further, there is no absolute rule/law that real estate values have to appreciate (the have and can go down). If your HELOC comes due after a decline in RE values, you may be forced to pay-off at its maturity - and if you don't have the funds to do so, sell in a down market in order to pay-off. My advice would be to not use a HELOC for debt consolidation; but, to systematically pay-off those other debts.
