WOW, this is so true...I know I have had issues with managing debt and found the use of a line of credit could help immensely! So make sure to read through and at the bottom, I will have a resource for you here in Denver to use to get a home equity line. You can use the same line of credit to get your Denver home ready to sell! What a great tool for a home owner who still has the laminate counter tops and wants to up-grade them.
Credit card debt in America is back to levels prior to the recession. The average credit card APR is just under 16% according to CreditCards.com Weekly Credit Card Report. Homeowners have an advantage over renters when it comes to getting their arms around debt issues.
Basic money management suggests that higher rate debt be replaced with lower rate debt. Credit cards, personal cars, boats, motor vehicles and other personal property, typically have interest rates higher than that of real estate loans.
Borrowing against a person’s home usually provides the lowest rate of financing. Refinancing a home mortgage to take cash out to retire personal debt is one option. Another would be to secure a home equity or HELOC, home equity line of credit.
An alternative advantage of borrowing against one’s home is that the interest may be tax deductible unlike the interest on most personal debt. Qualified mortgage interest includes acquisition debt which can only be used to buy, build or improve a principal residence and up to $100,000 of home equity debt which can be used for any purpose.
Managing money is a critical life skill that people need to master. While the goal may be to become debt-free, paying the least amount of interest possible can be a good first step. Owning a home provides an asset that allows for options not available to tenants. Seek professional advice to determine your best course of action.
Denver has some great sources for lower interest rate home equity loans or even a re-finance for your mortgage. I do have some experience and would be happy to share my knowledge and experience, so drop me a note at pete@DenverRelocation.com. Or if you want to re-finance that home in Denver go to https://www.DenverRelocation.com/lenders.shtml.