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Use Your Home Equity To Consolidate Your Debt
Sometimes it makes good financial sense to use the equity in your home
to consolidate debt. Depending on your financial goals, it may be just
the thing to do if you want to:
Make
your debt tax deductible* Pay
off your credit cards Consolidate
many small payments into one Reduce
the interest rate on your high-interest debt Lower
your total monthly payment amount
There are a several ways to access the equity in your home to consolidate
debt:
A
cash-out refinance A
home equity Loan A
home equity line of credit
When you refinance
to get cash out , you're essentially refinancing to a loan amount
more than you currently owe and taking the difference in cash. Depending
on your current interest rate, you may actually be able to lower your
payment and pay off other debt with the cash. It's possible to lower
your overall monthly payments with a cash-out refinance.
A home
equity loan is a second loan to tap into your equity. Commonly
referred to as a "second mortgage," a home equity loan allows you to
get cash for your equity without refinancing your first mortgage and
usually in less time.
A home equity line of credit is very similar to a credit card except that it
uses your equity as the revolving line of credit. You pay only if and when
you use the money. You can get a home equity line of credit in as little as
ten days.
When you use the equity in your home to consolidate
debt , you do not reduce the amount or your debt. Instead, you
lower the interest rate you pay. It's important to not run up your
credit card debt again. It may be a good idea to close your credit
card accounts and keep one for emergencies only. If you increase your
monthly cash flow by consolidating, think about saving, investing or
paying down your debt faster.
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NEWSLETTER 
Make
your debt tax deductible*
