Bill Consolidation with a Home Equity Line of Credit
Rising home values have offered a lot of debt relief to homeowners across the United States. Many have refinanced their homes to take out equity or they have taken out a home equity loan to consolidate their bills.
A home equity loan is just as effective for bill consolidation as a debt consolidation loan. Home equity lines of credit are especially helpful because they have very low interest rates and the term of the loan is usually lengthy.
If you have a lot of debt and you own a home that has equity, a home equity line to consolidate your debt is a smart option. To figure out if it is the right option for you, ask yourself these questions:
- How much equity do you have in your home? Subtract your mortgage payment from the approximate fair market value of your home. The FMV (Fair Market Value) compares your home to ones like it that have sold recently.
- Meet with your mortgage broker about debt consolidation loans or home equity lines or credit and inquire if there are any programs that cover both.
- Get more than one quote while you’re out there assessing your options. Additionally, you may want to take advantage of consumer credit counseling to ensure you don’t make the same mistakes again.
