If you have equity in your home, you may be able to reduce the amount you are paying
to creditors each month by hundreds of dollars. We work with mortgage experts who
have experience helping people with less than perfect credit – even those on debt
management plans – consolidate their bills into one affordable monthly mortgage
payment. A debt consolidation home equity loan is a secured loan where your property
will be security against the loan. The lender will have a lien on your house until
you pay off the home equity loan in full. While you'll continue to own your home
as loan collateral, the debt consolidation loan will keep the creditors away and
keep you out of bankruptcy. You'll be able to save a little, because the single
monthly payment will be considerably less than the sum of the ones you had before.
The first thing to do once you've obtained your debt consolidation loan is to look
over the use of your credit cards, so that you don't use any of them in times of
temptation, thereby increasing your debt. This will definitely put you right back
in hot water.
Tax deduction and home equity loan consolidation
Another possible advantage is that interest you pay on your equity debt consolidation
loan may be tax deductible. Normally, if you add your first mortgage to a new debt
consolidation loan, and the total does not exceed 100% of the appraised value of
your property, the interest you pay will be fully deductible. Your tax consultant
can advise you on the matter, and it's always a good idea to check with him or her