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Category: Financial Planners

Should I Take Out A Home Equity Loan To Consolidate Credit Cards?

By Leo Quinn, Jr

If youre like most Americans, you have some sort of credit card debt. If youre paying upwards of 10% and even 20% on those credit cards, then chances are you arent making much headway when it comes to paying them off.

Turn on any TV or pick up any newspaper and youll find the home equity loan or HELOC (home equity line of credit) market is directly targeting consumers strapped with high-interest credit card debt.

The upside? Most home equity loans or HELOCs run between 7% and 9%, a much better rate than the 18% to 21% of store credit cards. This alone could save a consumer hundreds to thousands of dollars over the life of a balance. Up to $100,000 of home equity loan interest payments are tax-deductible. Minimum payments are usually lower, and principal is paid down much faster.

The downside? Your debt is now tied to your home. If you default on the home equity loan or HELOC, you could lose your house. For anyone with even a slight tendency towards undisciplined use of credit cards, consolidation through home equity may be disastrous. There are usually closing costs associated with these types of second mortgages, so dont forget to subtract those amounts from any interest saved.

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Before you make a final decision, consider the following factors.

How much will you actually save on interest? There are a multitude of financial calculators on the internet to help you determine what you will pay in interest over the lifetime of a credit card balance. Compare this to what you will pay with a HELOC or home equity loan. Dont forget to factor in closing costs such as loan application fees, appraiser fees, mortgage filing taxes, etc.

How much do you owe? The general rule is to consolidate at $10,000 or more, but simply transfer to cards with lower fixed rates if your balance is less. If you have reasonable credit, you can usually find credit cards with lower fixed rates and transfer your balances. Even if you have to re-apply for new cards every nine months to a year, it will be worth the effort.

What caused your credit card debt to begin with? If it was a one-time expense such as college tuition, medical emergency, job loss or weddingand youre generally good about living within your meansthen debt consolidation is probably an excellent option.

If your credit card debt stems from trips to the mall, a big-screen TV, a cruise and lots of other stuff you dont even remember, then chances are consolidation is NOT a good option for you. Regardless of your balance, youll be better served transferring balances to lower-rate cards.

Regardless of what you decide, make sure to read the fine print on all home equity or credit card offers. Look for fees and closing costs, and factor them into your decision. Avoid the urge to medicate your debt pain by making hasty decisions. Take a few days to mull over offers youre considering.

Either option will save you money and start you down the road to debt freedom, so examine your options, make your decision, and get started!

About the Author: A financial educator for over ten years, Leo Quinn Jr. specializes in helping people get out of debt and stay that way. His How to Own Your Paycheck Again program has helped thousands of families improve their finances and escape the debt trap. Learn more at



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Why Use A Mortgage Broker In Toronto?

By Zhanna Krupnikov

When it comes to mortgages in Toronto, there are indeed many mortgage products available. Because securing a mortgage loan is an important financial decision and there are plenty of options available, people in Toronto prefer to seek professional expertise while choosing a mortgage product for themselves.

An experienced and trusted mortgage broker in Toronto usually proves to be very helpful when you are planning to opt for a loan against some collateral security. The different advantages of seeking the services of mortgage brokers in Toronto include:

— Most renowned mortgage brokers in Toronto offer their services for free. Do not get surprised. They get paid when they lend to institutions.

— With an expert by your side, it becomes easier to understand the terms and conditions of different mortgage products clearly and to choose the one that will be simply perfect for your needs. A mortgage agent will also help you approach a reliable lender. This helps when you have over a hundred lenders ready to offer you a loan.

— When you decide to go for the services of a broker, you will be saved from doing the research on different lenders and mortgage products. Most mortgage brokers have in-depth knowledge of the market. In addition, they will do all the necessary legwork required to find the best possible rate.

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— Qualifying for a mortgage is the most important and time-consuming aspect of any mortgage product. A mortgage broker in Toronto with relevant experience in the field will help you pre-qualify for the mortgage easily so that you can purchase your dream home with having to wait for too long.

— They will also help you get the best possible rate by underwriting your deal and presenting it to multiple lenders. They will also discuss your needs and different possible options with the lenders. Their only mission is to help you find the best financing solution.

— Mortgage brokers in Toronto offer you more than just a loan. They usually guide you through the entire process until you get the keys to your dream house. They will also give you a list of trusted real estate advisors, if you need any. Because a home mortgage loan is an important financial decision of one’s life, they will also refer you to property appraiser, property inspector, lawyer, and financial and insurance advisor if you need one.

— Many reputable mortgage firms based in Toronto have multilingual mortgage specialists to better understand their clients’ requirements and explain them the different options available in greater details.

— With an expert by your side, it becomes easier to understand the terms and conditions of different mortgage products clearly and to choose the one that will be simply perfect for your needs. A mortgage agent will also help you approach a reliable lender. This helps when you have over a hundred lenders ready to offer you a loan.

So, if you are in urgent need for a mortgage in Toronto, do not waste time. Look for a reputable mortgage broker that can help you find the best financial solution for your needs.

Check out for information on different refinancing options.

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