Home Equity Loan to Pay Off Debt

I own my home outright. Would it be wise to get a home equity loan and pay off my debt?

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Bill's Answer: Bills.com Resident Expert

Home equity is the value between what your home is worth (in a sale, or an estimate of this determined by an appraisal) and the amount you owe on a mortgage(s). If your home is "paid off" or you do not have any mortgage balance remaining, you can certainly 'tap' that value by either refinancing your home, and creating a first mortgage, or by taking out a Home Equity Line of Credit (HELOC).

If you are looking to borrow money to pay off other debts (you mentioned 15% APR), a home loan is almost always your best route, since you get a low rate and the interest is tax deductible. With your old bankruptcy removed from your credit report, you may qualify for a low rate loan, which will keep more of your money in your pocket, and lower your monthly debt payments.

Bills.com makes it easy for you to apply for a loan.

Be sure to shop around and compare options, so that you get the best deal suited for your needs.

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