AMBER M asked:
We have around $30k equity in our home and we got ourselves in over our heads with credit cards, so we are making around $800 payments a month on credit cards, we inquired about a loan and found we can get one for 8 % 10 year term and $250 payments. Sounds absolutely great to me, I mean we will be saving $500 a month! Are there any downfalls to this that they arent warning me about?
SIMON
We have around $30k equity in our home and we got ourselves in over our heads with credit cards, so we are making around $800 payments a month on credit cards, we inquired about a loan and found we can get one for 8 % 10 year term and $250 payments. Sounds absolutely great to me, I mean we will be saving $500 a month! Are there any downfalls to this that they arent warning me about?
SIMON
DARNELL
Make sure the interest rate is a fixed rate and that it is a term loan and not the equity line of credit. It is a good idea and this way the interest you pay will now be tax deductible vs paying credit card interest(which you pay interest on the interest accrued where with the equity loan it is simple interest and you don’t ). I had a home equity loan before and I would recommend it to you.
LINDSEY
I would do it, just so you get out of debt. Be sure to get rid of those credit cards, though!! Do not get yourself into that situation again. As you can see…it’s not fun! You will not only save $500 a month, but you will also have more interest to write off on your taxes. Be smart this time..you are lucky to have the $30K in equity!
HARRISON
I am doing that right now… Yes it is worth it becouse you cna pay everything off and your payment will go up some biut majke sure u get a FIXED rate and not an ARM…
And right now the instrerst rates are low
TONY
I have had several equity lines but none were to pay off debt, they were used for home improvements. Personally, I think that using home equity to pay off credit card debt is a bad idea. This type of loan is, in effect, a second mortgage on your home. If you default you can lose your home. There are services that can help you with your debt and you should research them before you go ahead with the Equity Loan. Don’t forget, in addition to what you borrow there will be closing costs that can add a significant amount to what you need to pay back. In addition, most equity lines are not amortizing so you pay only interest and very little principal. My advice is to be careful. Find out all you can about hidden fees, amortization schedule, late fees, etc.
HUNTER
Home equity loan may increase your mortgage payments. If you take out enough to manager your budget for the next 1 or 2 years. you will not be able to sale your home or refiance depending on the contract. If you break the contract there will be 2per cent penalty of about 3,000 dollars.
ADOLFO
we pulled out all the equity in our home (approx 30,000) to pay off credit card bills – but now our mortgage is more than we can sell our house for. so if your not planning on moving then it is a good idea – just don’t use the credit cards anymore. I consolidate all my credit cards to a 0% for 12 months card and make large payments on that instead.