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Is It A Good Idea To Pull Out A Home Equity Line Of Credit To Pay Off Debt Or Should I Just Leave It Alone?I want to get rid of debt, car payments, loans and combine into one or two payments but not for 30 years. Maybe one bill for home another for debt. Does that make sense? How can I do this alone? 5 comments to Is It A Good Idea To Pull Out A Home Equity Line Of Credit To Pay Off Debt Or Should I Just Leave It Alone?You must be logged in to post a comment. |
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It makes sense IF you can control your budget. Taking “J”‘s advice is very risky plus he makes a faulty assumption in that you are increasing your debt. If you can control your spending you are not creating more debt by using the HELOC to pay off car loans and credit cards, but rather you are converting that debt to potentially a debt with a lower rate of interest that also provides tax benefits. To give that advantage up, leave your current debts as they are and incur new debt in order to have funds to invest is a very risky proposition. With any poor investment experience you are leaning more heavily on your income to pay a much larger debt load. Not a prudent idea.
yes because interest is tax deductible so you save in taxes plus you dont have such a high interest rate. just cuz the bank puts it out 30 yrs doesnt mean you have to. continue to pay the same amt of your credit cards if you can and you’ll pay it off faster OR if payments are the problem, by refi’g it like that you’ll skip one months payments because the month the loan goes thru the bank will pay all those bills for you. you just got yourself hundreds that month off your budget!
Many times when this is done a person is in more debt and still charging on the credit cards. Learn new behaviors before putting you house in jeapordy.
You can write off the interest that you pay toward your home equity line of credit. It makes sense if your payoff is no where in sight.
To get into debt to increase debt doesn’t make cents.
To get into debt to increase revenue makes cents.
Use your home equity line of credit to buy things that generate revenue; and then use that revenue to replinish the equity AND reduce your other debts.
J