Ads 468x60px

Friday, April 22, 2011

Debt Consolidation for Homeowners


If you are a home-owner looking for credit card debt assistance, then you have the one major resource you need already in your possession. There are two ways in which you can use your home to help consolidate credit card debt; cash out refinancing and home equity financing. If you follow the right procedures, then you may be able to use cash out financing to lower your monthly payments while helping you get your financial obligations under control.


Cash-Out Refinancing:
A cash-out refinancing is when you refinance your mortgage for an amount that is more than you owe, and then you can use the difference to consolidate your debt. For example, if you have $60,000 left to pay on a $100,000 mortgage, then you can refinance the mortgage for $80,000 and use the extra $20,000 to pay off your debt. When you do a cash-out refinance, always make sure that the interest rate on the new loan is less than the interest rate on your original mortgage. This will lower your interest debt. If you feel you can afford to pay a mortgage for another 30 years, then you can get a 30-year refinance and significantly cut down your monthly payments.
Prior to committing to a cash-out refinance, always discuss your options with the bank representative to make sure that you are reducing your interest debt and monthly payments.
Home Equity:
There are two types of home equity financing; a home equity loan and a home equity line of credit. Equity in your home is the difference between the value of your home and the amount that you owe on your mortgage. A home equity loan is a loan that uses the equity in your home as collateral. Much like a mortgage, a home equity loan can have a fixed or variable interest rate.
 
A home equity line of credit is a line of credit where the limit is the amount of equity in your home. If you have $10,000 equity in your home, then you would receive a $10,000 home equity line of credit. The big difference between the home equity loan and line of credit is with the line of credit you only use what you need. The loan, much like other loans, is a lump sum.
Owning a home gives you two good options for credit card debt assistance. Before getting involved in one kind of financing or the other, be sure to discuss your options with a financial expert.

1 comment:

  1. No credit check cash loans are promptly given to the working people who need to pay some urgent bills within a day or so. The borrowers are not subjected to any credit checks when borrowing the loan.

    payday loans

    |
    cash loans

    ReplyDelete

 

Sample text

Sample Text

Sample Text