Home Equity Line Of
Credit - Consolidate Debt with Second Home Mortgage Even With Bad Credit
- Save Money and Lower Payments
May 11th 2006
Home Equity Line
Does it make sense to consolidate credit card debt into a home loan?
There are a lot of factors to mull over before doing so, but it should
be considered if you feel you may be unable to meet your obligations
soon. If fact, it might be better to consider debt consolidation before
you miss or are late on a payment.
Many will advise that it is a mistake to place unsecured credit card
debt into a secured home loan. But with recent changes to the
bankruptcy laws, it may be harder to shake the unsecured debt than ever
before. Recent policy changes that required credit card companies to
double their minimum payments have also made it harder for some families
and business people to meet their obligations.
Some experts predict that interest rates will continue to rise. If that
is the case, wouldn’t it make sense to have your debt locked into a loan
with a fixed interest rate? Extending the payment period over 30 years
will also lower the monthly payments. In some cases, these payments can
be reduced by 50%.
So what if you have missed a payment or have bad credit? There are
lending agencies and brokers that may be able to help. It may be easier
to get a secured home loan than to qualify for new credit cards.
Sometimes outstanding credit card debt is looked upon as a negative just
as too much available credit is. In fact, consolidating your credit
card debt into a home loan may make your credit rating better.
Gas prices and insurance can be major expenses for middle class
families. A medical emergency can also cause hardship. Many people
should consider equity lines of credit. Potential barrowers don’t
actually have to take the full amount, but it can act as a
security-blanket in case you lose your job or have a medical emergency.
Some business people have used equity lines of credit to finance
There are many equity lines of credit. A popular equity home loan will
consolidate credit cards debt allowing the borrower to specify this
amount into a fixed interest rate with a specified pay off time ranging
up to 30 years. By locking the interest rates you are able to freeze
interest if you believe the interest rates will go up. The remaining
available balance can be used in the future, but may be charged an
adjustable rate until the homeowner decides to lock it in. Typically,
the line of credit will last for 10 years with 5 locks and a 30 year
term. The bank may issue you a checkbook for which you can draw on.
Many Americans have seen their houses skyrocket in value over the past
few years, while their credit card debts mounted. New laws and policy
changes have made equity lines of credit and 2nd mortgages
more appealing to the homeowner.
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