Consolidating debt with a home equity loan speed dating events in manchester

Accessing home equity as a refinancing tool is easy, and seems logical, but it is fraught with dangers and you could wind up losing your house if there is a downturn in the economy, real estate prices plunge, or you lose your job.

You’ve made mortgage payments for the past 15 years, your home has soared in value and you now have access to a pool of cash using a home equity loan or line of credit.

Sounds great if you need money to pay off debt, but think before you jump.

HELOCs are credit lines, meaning you use as much of a pre-approved loan amount as you want, when you want.

The amount you can borrow is based on a number of factors, including the amount of equity you have in your home, your income and your credit score.

Lenders usually require that you maintain at least 20% equity in your property.

A home equity loan, on the other hand, is usually a lump-sum loan and is often called a second mortgage.

If you owe 0,000 on your primary mortgage, then you potentially could qualify an equity loan or credit line of ,000.

Reducing interest payments is the main advantage of debt consolidation using a home equity loan.

Lenders won’t give you an equity loan or an equity line of credit unless you meet underwriting standards.

Even if you have enough equity in your house to cover what you want to borrow, lenders don’t want to have to foreclose to get their money back.

If you opt for a HELOC, you might not have to make any principal payments during the first 10 years that you have the credit line.

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