Some may argue that the easiest way to put your home in jeopardy is to try to consolidate credit card debt by taking a home equity loan to pay off your credit card balances. While financial institutions will advertise the advantages of paying off high interest credit card debt with a bad credit home equity loan they may not inform you of all of the ramifications of using your home as collateral.
They will also inform you about the potential tax benefits associated with this type of loan and how settling credit card debt can positively impact your credit score. However, it is advisable to consult with a tax advisor regarding these matters when contemplating a home equity loan. While paying off credit card debt can enhance your credit score, this alone may not be a sufficient justification to take on the associated risks.
Linking your debt with your home is not always a prudent decision. While it may address immediate financial needs, maintaining the security of your home is crucial if unforeseen challenges arise in the future. If job security is a concern, and you do not require reserves in the bank, it might be wise to refrain from utilizing your home equity at the moment.
If you want cash or have high interest loans and credit card with compounding interest, now is the time to consolidate your debt. Our experienced loan team has helped thousands of Americans just like you, recapture control of the home finances so that they can realize their dreams with for home construction, paying for their children to go to college and of course retiring in style. This article was written by Mary Stasiewicz.