If you are a home owner, you stand to benefit from home equity loans. These loans come in handy to help you meet your financial obligations or make home improvements. The good thing is that, they are almost guaranteed regardless of your financial records. Lenders rely on the fact that you offer your home as security for the loan and they therefore have something to fall back on in case you default on payment.
Equity in this case refers to the difference between the value of the home and the balance you have on your mortgage. When applying for the loans, you could consider doing so through the two available options. The first one is basically the home equity loans and the other is home equity lines of credit. These loans are also referred to as second mortgages.
When you acquire these loans, you can then use them to consolidate your existing debts. The loans can fetch up to 80{919468b76a1b111b1791bdf3e51426d8562c963af300c016649515c15309dd6c} of the value of your home, money that is good enough for you to clear off all existing debts. You can consolidate your bills through a number of options which include mortgage refinancing. This means that you will acquire a loan at a lower interest rate, pay off the mortgage and what remains can be used to clear all debts.
The other option is to go for second mortgages, which do not differ much from the first one, but they have nothing to do with the first mortgage. Although they have higher interest rates than the first mortgage, they normally are not given much priority when it comes to repayment and for this reason, you have more time to plan for repayment. You can therefore use the loan to consolidate all existing bills.
