Debt consolidating home equity finance
Consolidating debt with a home equity loan could be a good option. You may have high interest credit cards, loans and mortgages. This is the practice of rolling all your debts into a single, monthly bill.
2014)When monthly bills get out of hand, debtors frequently look to debt consolidation.
The exception would be your mortgage; if you're having trouble paying that, you need to work that out directly with your lender, perhaps through a loan modification.
Second, you may be able to set up a consolidation loan that lets you pay off your debt over a longer time than your current creditors will allow, so you can make smaller payments each month.
That's particularly helpful if you can combine it with a lower interest rate as well. Basically, you borrow a single, lump sum of cash that's used to pay off all your other debts.
Home equity loans come in two major types a standard home equity loan and a home equity line of credit (HELOC).
The standard home equity loan is the most commonly used for debt consolidation because you borrow a single lump sum of cash, whatever you need to pay off your debts, and then pay it off over a period of years at a fixed interest rate.