Question

What should you pay attention to when you use a home equity line to pay off all of your high-interest credit cards?

Answer 1

Yes, we can use the home equity line to pay off the high interest credit card, as the major attractive feature is the lower interest rates plus the interest paid on the amount borrowed is also tax deductible.

The points to pay attention to while using the home equity line is :

• The fear of deafult in the loan, that make the borrower risk the house they own. Securing the loan with the house as collateral can be permanent scarring event.
• The fees which are eventually added up like the fees for the home appraisal and otherclosing  costs involved which is typically ranging from 2% to 5% and that can actually make it quite expensive.