How easy is it to get a home equity loan? I would like to use that to pay off cc debt.?
Written By: admin on November 28, 2009
4 Comments
Im not quite sure if I should be going to a mortgage broker to apply for one, or just go to each bank individually? Also, are there any out there that do not have a repayment penalty? I am also assuming that once the property sells the loan needs to be automatically repaid.
I would also like to know how this will affect my credit score. Is it better to have an X amount on credit cards, or have that same amount on an equity loan.
Thanks
I already know the whole "you shouldint have gotten yourself into debt" speech. My husband and I paid for our own wedding, therefore the debt.
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Tags: amp, credit cards, Credit Score, equity loan, mortgage broker
Don’t rely on home loans to pay credit card debt.
The primary difference between credit card debt and home equity loans is that the latter are "secured" loans. You’ve pledged your house as collateral against the amount you borrow. If you fall behind on your payments for any reason, you could potentially lose your home.
In my experience, when people borrow against their homes to eliminate credit card debt, they typically just slide right back into it — at the same level or worse — within two to three years. That’s because even after wiping the slate clean, they don’t change their spending habits. They max out their credit cards all over again and find themselves in an even deeper hole.
Is it possible to use your home equity to pay down debt and then stay out of debt? Of course, but generally those disciplined enough to pull this off don’t let their credit cards run amok in the first place.
Instead, I suggest calling your credit card company today and asking to have your interest rate lowered. It’s a simple phone call that takes all of five minutes. For more details, read my earlier columns "Five Steps for Ditching Credit Card Debt" and "What Credit Card Companies Don’t Want You to Know," and check out the reader comments for more fantastic tips on getting out of credit card debt without using your home equity.
Shouldn’t be any problem at all. They are always pushing loans. Go to the bank where you have your mortgage. That’s a excellent choice to pay off the credit card as I assume it has a high interest rate. If not, don’t do it.
why borrrow money to pay off debts — i yet to have anyone come up with a pro for doing it — just downsize a small and quit charging and pay off you debt highest interest first until you get back in control — more folks lose there homes this way!!!
I agree with the other answers that said you will just get into more distress.
Sad to say, people want instant gratification and they have no self control
Most vital thing is a written budget
most people that have them never get into a money crises