How Can a Home Equity Loan Help Consolidate My Debt?

Could a home equity loan help you with your debt? Could you benefit from debt consolidation, so you only have to manage one payment? You could go through a debt consolidation company, or you could take advantage of your home or property to get control of your finances. Here’s how a home equity loan could help you consolidate your debt.

What is Home Equity?

Your home equity is the value you have in your home, or the difference between what you owe and what your home is worth in the current market. The amount of money you’ve paid on your mortgage loan at any given point is equal to the amount of your home that you own outside of your mortgage loan.

How Does a Home Equity Loan Work?

A home equity loan is like a second mortgage. It is a loan given by a lender and secured by the equity in your home. A lender will determine the amount you qualify for based on the amount of equity you have in your home. Like your first mortgage, they come with interest and a repayment term.

How Does it Help with Debt?

The loan on your home equity can give you the cash you need to pay off your debt. In addition, you can use it to pay each creditor, and your home equity loan becomes your single consolidated loan payment.

A home equity loan isn’t necessarily available to every homeowner or every debt consolidation situation. To find out if it might be an option for you, contact Midland Mortgage Corporation to talk to a loan officer.

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