Using Home Equity to Consolidate Debt

Using home equity to consolidate your high-interest credit card debt can be a very smart financial decision for most. During this process you are spreading your debt throughout mortgage payments while paying off creditors using your home equity. You won’t be actually lowering the amount of your debt, but you are lowering interest rates, making it a lot easier to pay off.

Here are some advantages of consolidating your debt using your home equity:

You pay a lower interest rate with a home loan than you would on a credit card, making it easier to pay off those debts.

The interest on your mortgage is usually tax-deductible whereas the interest on a credit card is not.

When you consolidate your debt, you only have to make one monthly payment as opposed to several. By having one lower monthly payment, you could be paying less each month than you would have if you hadn't consolidated.