HOME EQUITY RATES

Home equity rates are generally higher than a regular mortgage when you take out a home equity loan. Furthermore, the rate is usually lower than the APR for credit cards and it can be paid back over 15 years instead of the 4 years. This means that your payments can be much lower than the minimum payments due on your credit card. One problem that arises is that people obtain a home equity loan in order to pay off their credit card debts. This is difficult because often spending habits are not curbed and the credit cards are in debt again – which emphasizes the problem. The term for this is ‘reloading’ where you max out your credit cards again, after using up your home equity loan. The danger in this is that you can lose your home.