Explore the Mortgage101 Library
Check Local Mortgage Rates
Loan Program Choices
Use our calculator to find out your estimated monthly payment in advance: Enter the loan amount, interest rate, and length of mortgage.
Try our Mortgage Payment Calculator
Consolidation of debt with a home loan by the owner of the property can be a smart financial move for the future. If you have a great deal of outstanding debt, consolidating it into a lower interest loan can be very beneficial.
Home Equity Loan
Using the equity in your home is a great way to consolidate debt because you will pay a much lower interest rate. Credit cards, personal loans and other consumer loan products have higher rates than the traditional home equity loan. If you have a lot of debt, you can get rid of the credit cards and consolidate them into one loan with a lower rate. The lower monthly payments will save you a lot of money. In addition to saving you money in payments, you can deduct the interest on your taxes.
There is also a loan called the home equity line of credit, or HELOC. A HELOC also uses the equity in your house and you can deduct the interest on your taxes, as well. The main difference with this type of loan is that there are no set terms and you can repay what you borrow. It works very much like a credit card for the first 5 to 10 years. The rates are typically lower and the interest is also tax deductible.
- 3 Factors that Can Negatively Affect Your Mortgage Application
- What Lenders Don't Reveal About Home Equity Loans
- FHA Loans for a First-Time Home Buyer
- FHA Eligibility with Bankruptcy and Foreclosure
- How to Get Approved for an FHA Loan despite Bad Credit
- 3 Common Short Sale Mistakes
- Second Mortgages: Advantages and Disadvantages
- 3 Warning Signs of Loan Modification Scams
- Home Equity Loans for People with Bad Credit