Owning a home can be one of the best investments you can make in life, because little by little you will accumulate equity in your home. When you have enough equity in your home, you can actually borrow money against it in the form of a home equity loan. You can borrow this money for many reasons, but a good reason is to pay off credit card debt you owe. Here are two key ways a home equity loan can help you save money if you have a lot of credit card debt.
You Will Save Money On Interest Charges
The first thing you should understand is that there is a great potential to save a lot of money on interest charges if you consolidate your credit card debts with a home equity loan. This is especially true if you are paying high interest rates on your credit cards.
You should add up the interest charges you are currently paying each month on your credit cards and compare this to the interest you would pay if you borrowed money through a home equity loan. By doing this, you will see if getting a home equity loan would be a good idea. There is a good chance you will find that it would be a good idea, simply because you might be able to save a lot of money each month on interest charges. Instead of paying a lot in interest, you will be able to pay off more of the principle balance you owe.
You Can Write Off The Interest You Pay On Your Taxes
The other important detail to understand is that you will most likely be legally entitled to write off the interest charges you pay on the home equity loan when you itemize your taxes. Interest paid on most home mortgages, including home equity loans, is usually tax-deductible. The interest you pay on your credit cards will never be something you can write off. The benefit of being able to write off this interest is that it can lower the taxes you must pay the IRS. If you are receiving a tax refund, it could help increase the amount you receive from your refund.
If you are struggling with mounds of credit card debt, there are options you could use to help you pay off your debts and save a lot of money, and using a home equity loan is a great option. To find out more details about home equity loans, call a mortgage lender today.
Three years ago, my husband and I started saving money for an extensive home renovation project. While we have been able to save a lot of cash over the last three years, we still don’t have enough money to pay for the upcoming remodeling project we plan to do at our home. Therefore, to raise the remaining funds needed, we are going to take out a home equity loan. If you need to do some home remodeling projects around your home, you should consider taking out a home equity loan. This type of loan can help you pay for important items such as new floors, a new roof, or new siding for your home. On this blog, you will discover the types of home equity loans offered at most lending institutions. Enjoy!