Consolidating debt with a home equity loan russian girl dating home
Lenders usually require that you maintain at least 20% equity in your property.
A home equity loan, on the other hand, is usually a lump-sum loan and is often called a second mortgage.
If you owe ,000 on your credit cards and your combined interest rate averages 20%, you would owe ,000 a year in interest on the balance, assuming it didn’t change.
The amount can be substantially less than your home equity.
There are other pros and cons in using a home equity loan for debt consolidation: The rules governing home equity loans and HELOCs are very similar.
Unless you have a very solid income and live in an area where home prices are consistently rising, replacing consumer debt with an equity loan is probably not a good idea.
If you opt for a HELOC, you might not have to make any principal payments during the first 10 years that you have the credit line.
After that, you can no longer borrow using the line and you must repay both principal and interest.