Are Home Equity Loans a Good Idea?
It depends. Many companies will tell you that the interest is tax deductible, you will be able to consolidate (pay one payment instead of multiple) your credit cards, the interest is lower, and that your monthly payment will be lower than what you’re paying on credit cards.
Be Careful.
- When you take equity from your home you are putting your home at risk.
- The interest on home equity is higher than a conventional mortgage. You may just be trading a few smaller bills for one larger bill.
- In Bankruptcy you can eliminate credit card debt and still have $150,000 worth of equity in your home.
- There are other costs involves. Look out for broker fees, more interest, and penalties.