Is consolidating debt into your mortgage a good idea
The interest rate is tax deductible and will be so much lower than credit cards, you’ll probably be able to buy a new Spanish tile roof.A home equity loan is borrowing against the value of equity that you have in the house.Credit cards in particular come with some of the highest interest rates in the financial industry.Getting rid of that expensive debt is a nice idea in theory, but finding the finances to do so can be difficult.Equity is the difference between what your home is appraised at, and what you owe on it.For instance, if your home’s appraised value is 0,000 and you owe 0,000 on the mortgage, you have ,000 in equity.Right now, you could be paying 15 percent interest on a credit card, as the national average is 14.83.
Don’t confuse a home equity loan for a home equity line of credit. With a home equity loan, you receive a lump sum and then repay it on a monthly basis.
The difference is that a HELOC is a line of revolving credit with an adjustable interest rate, instead of a fixed-rate, lump-sum loan.