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.The lender will assess your creditworthiness and the local real estate market to decide how large a credit line it will offer and at what interest rate.The amount can be substantially less than your home equity.You should consider seeking help consolidating your debt without using home equity.To do that, consider talking to a nonprofit credit counselor to develop a strategy.
Home equity loans have traditionally been used to add to the value of the house, paying for such things as kitchen remodeling or a new roof.
Using a home equity loan for credit card debt works for some people but could lead to disaster, especially for those with trouble managing consumer debt.
The biggest potential problem is that you convert a consumer debt, which doesn’t require collateral, into a home loan that does require collateral.
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.