5 Bridge

For homeowners that need a large sum of money fast, home equity loans seem like a dream come true. They are relatively cheap loans that give borrowers the benefit of a fixed interest rate. Thier terms aren’t as good as initial mortgages, but they’re often a lot better than credit card, car loan and personal loan rates.

Borrowing against home equity can give you the cash to pay off credit cards, pay off or buy a car, and fund major expenses like weddings or college tuitions. Consolidate debts, and you’ll make just one loan payment instead of multiple payments to different creditors. The loan payment is likely to be lower, too. With so much opportunity, why hesitate to take advantage of a home equity loan?

First, consider that you already paid fees and finance chargest to a lender once when you took out your mortgage. Refinancing means you will pay them again. Second, consider that if you were unable to live within your means before the loan, what will have changed? Will a home equity loan be a solution, or just another way for you to continue spending and borrowing? Tapping into your home equity to go deeper into debt is a mistake you can’t afford to make.

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