How to Refinance Your Credit Card Debt with a Home Equity Loan

Tip! Reverse Mortgage - Retirees remaining in their homes can still tap their home equity as a source of retirement income. An entire industry has grown up around the 'reverse mortgage' concept which allows seniors over 62 to tap into their home's value without making any repayments during their lifetime.

Are you burdened with a pile of credit card debt? Are you seeking options to reduce your debt? Run a search through the Internet, or seek some financial advice and you will realize that there are many ways you can achieve your objective. If you possess a home with equity, you can consider acquiring a home equity loan to refinance your credit card debt. This way, you no longer have to bear the high credit card interest rates, or consider bankruptcy to get your debts cleared.

Home equity loans, which function like a second mortgage, allow you to borrow based on the current value of your home. For instance, if the market value of your home is $300,000 while your outstanding mortgage is only at $200,000, you are entitled to a home equity loan of up to 80% of the additional equity. Some lenders even allow up to a 100% home equity loan. This is the power of owning property that appreciates in value over time.

Thus, with the cash-out that you have received out of the home equity loan, you can then utilize that to pay off your credit card debt. This does not mean that you are debt free though. You have just merely transferred your debt from high interest credit card debt, to a lower interest home equity loan. This way, it will be easier to plan out your finances and pay off your loan through monthly repayments without having to bear hefty interests.

The first thing that you need to determine is the current value of your home. This is easily accomplished by researching on other houses in your area and the price that they have recently been sold for. Other than that, you can engage a realtor and check with them on the current market value of your home. It's best that you can cross-check with a few realtors in order to acquire a more accurate view on your home equity value.

Tip! Most debtors apply for a home equity loan especially if they are stuck in 17% to 21% of their credit card debt. Some homeowners tend to apply for a home equity loans to use the money to pay off debts that have high interest rates.

Next, you need to determine the term of your home equity loan, which will affect your monthly repayment each month. There is no point converting your credit card debt into home equity if you can't afford to pay for it. Use mortgage calculators with an estimated interest rate to find out your possible repayment amounts. Finally, go online to shop for home equity loan lenders. Compare their terms and rates to find the one that gives you the best deal. With this, you will be well on your way towards paying off your credit card debt through your home equity.

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Home equity loans drying up for some - Business - Personal finance ...
Like many homeowners during the housing boom, Lynnette Madden and her husband decided to open a home equity line of credit about a year and a half ago as ...
Americans' home equity near a record low - Business - Real estate ...
WASHINGTON ? Falling U.S. home prices have shrunk equity so much that the proportion of their homes that Americans actually own is near its lowest point ...
Home equity lines have dried up across U.S. - Business - Personal ...
Home equity lines have dried up across U.S. As home prices collapse, banks cut off credit, further souring the economy Below:
Late payments for home equity loans rise - Business - Real estate ...
WASHINGTON ? Late payments on home equity loans climbed to a 1½-year high in the opening quarter of this year, while delinquencies on credit card bills ...
Retirees no longer count on home equity - Business - Personal ...
Many Americans have recently found themselves changing retirement plans after losing a substantial amount of home equity as the housing market and the ...
Equity in Americans? homes falls to historic low - Business ...
NEW YORK ? The equity Americans have in their most important asset ? their homes ? has dropped to its lowest level since the end of World War II ...
Students get creative to pay off loans - Business - Personal ...
Lines of credit typically work like a credit card, with a limit and a revolving balance: the average home-equity line of credit currently has an interest rate ...
Use of home equity hits a four-year low - Business - Real estate ...
Use of home equity hits a four-year low Freddie Mac report cites falling residence values, stricter lending standards Below:
Ford, Toyota are pinning their hopes on China - Business - Autos ...
NEW YORK ? Ford Motor Co. plans to build a new assembly plant in China ... $30K home equity loan FICO: 5.75%
Cities sue, invest to stop foreclosures - Business - Real estate ...
These stem from lost tax revenue and jobs as well as slower consumer spending that come with home equity declines, and don?t even include the financial toll ...

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