Consolidate Your Debt With a Home Equity Loan and Improve Your Credit Score

A home equity loan is a loan based on the difference between what your current home value is and what you currently owe on your house. There are also mortgage companies that will loan a little over the equity you have in your home. They can usually do this safely because most homes appreciate in value over time.

If you have credit card debt at a high interest rate, or even at an average rate, you may want to consider getting a home equity loan to consolidate your credit card debt for a few reasons.

1. Having the credit card, but not being maxed out, or having the credit card paid off will boost your credit score. The amounts you owe make up about 30% of your credit score, that could be a huge difference if those accounts are paid off.

2. You can have a lower payment because of the lower interest rate you can get with a home equity loan. If having a lower payment helps you be able to make the payment on time, that will boost your score tremendously.

3. Lowering your payment will lower your debt to income ratio, which will help you when you go to get any other kind of financing in the future.

4. A home equity loan is usually set for about 5 years before it is paid off. Sometimes, making the minimum payments on your credits will never pay them off.

As you can see, there are some great benefits to consolidating your debt with a home equity loan. Its definitely something worth considering if it will lower your rate and lower your payment.

To view our list of recommended home equity lenders online, visit this page: Recommended Home Equity Line of Credit Lenders Online.

Carrie Reeder is the owner of ABC Loan Guide, an informational website about various types of loans.

Latest News


When refinancing mortgage makes sense
Chicago Tribune, United States - Nov 14, 2008
But you don't have to be in financial trouble to benefit from mortgage refinance, real estate experts say. "At this point, there are thousands of good ...

Boston Globe (registration)

Center for Responsible Lending and Industry Groups Urge HUD to ...
MarketWatch - 14 hours ago
... to help the largest possible numbers of at-risk borrowers. This is not the appropriate time to permit the lapse of a viable mortgage refinance option.
HUD Said to Entice Banks to Enter Foreclosure Program (Update1) Bloomberg
Major Revamp Of Two HUD Mortgage Relief Programs To Be Pushed AHN
Tips On Saving Your Home From Foreclosure North American Press Syndicate
Housing Wire - BusinessWeek
all 94 news articles

The Money Times

Mortgage Applications Fall
VillageSoup Belfast,  USA - 21 hours ago
Mortgage rates were down slightly, so most of the decrease was in mortgages to purchase homes. The refinance index increased 2.6 percent, while the purchase ...
HOUSING: Mortgage applications among buyers dip North County Times
US MBA’s Mortgage Applications Index Decreased 6.2% Last Week Bloomberg
Mortgage Applications Down 6.2 Percent; Near 8-Year Low RTT News
MarketWatch - Reuters
all 144 news articles

Should you refinance your mortgage?
Vail Daily News, CO - 18 hours ago
Many homeowners are finding it increasingly difficult to afford the mortgage payments on the loans they have taken out in the last several years. ...

Los Angeles Times

Nehemiah Applauds FDIC Chair Sheila Bair for Calling Attention to ...
MarketWatch - 21 hours ago
Further, distressed families could easily refinance out of risky adjustable rate mortgages into low-interest, fixed FHA mortgages using DPA. ...
Should Obama name FDIC's Bair as a Special Advisor for Mortgage ... BloggingStocks
FDIC Revises Proposal to Refinance Troubled Loans DSNews.com
New Year US Housing Market Forecast: No Gain, More Pain Money Morning
Wall Street Journal Blogs - Boomers-Bank
all 957 news articles

Now Available Again: Stated Income - Verified Assets (SIVA) Real ...
PR Web (press release), WA - 3 hours ago
As a full-service residential mortgage lender, Katz Mortgage Team specializes in residential mortgages, mortgage refinancing, adjustable rate mortgages ...

Foreclosure mediation, relief for the 'little guy'
Minneapolis Star Tribune, MN - 7 hours ago
... on their 2006 mortgage adjusted up from 6.53 percent to 10.35 percent. That raised their monthly payments from $1800 to $2600. They couldn't refinance, ...

Rell announces: homeowners reducing monthly payments
TownTimesNews.com, CT - Nov 20, 2008
... November 13, announced that Connecticut homeowners using the refinancing program she created last December in response to the subprime mortgage crisis ...

Refinancing Borrowers Choose Safety of Fixed-Rate Mortgages
DSNews.com, TX - 15 hours ago
... prime borrowers who originally had a 1-year conforming adjustable-rate mortgage (ARM) chose a new conforming fixed-rate mortgage when they refinanced. ...

Capmark Finance Originates $23425000 for Refinance of Autumn Chase ...
PR Web (press release), WA - 16 hours ago
Capmark has three core businesses: lending and mortgage banking, investments and funds management, and loan servicing. Capmark operates in North America, ...

Resources