Consolidation is Key
Home owners have options for debt consolidation that others might not have. Having equity in a home can enable you to get a debt consolidation loan that others may not be eligible for.
If you have equity in your home and high interest rate credit cards, you might want to consider moving your debt from those cards to your home. In doing so there are risks involved, but there are also benefits.
You will undoubtedly end up with a lower payments and interest rate by moving them, as with your home as collateral these things come with the deal.
However, if you default on the debt consolidation loan they can come after your home – whereas when they were separate debts your home would not be in jeopardy.
If you know that you will pay back the debt consolidation loan and are simply trying to get out of debt faster, then attaching it to your home is a smart idea. But if you are having major problems paying your debts, and don’t know if you will be able to pay back even this new loan, then you may not want to take that step.
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