Tag Archive for: debt consolidation

Debt Consolidation with a HELOC

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Are you buried under a pile of bills? Consolidating debt can help. One way to do this is with a HELOC. Today we are going to discuss debt consolidation with a HELOC. Let’s break it down.

First and foremost, What is a HELOC?

A HELOC is a Home Equity Line of Credit. To put it another way, it’s a loan based on the value of your home. Therefore, you can borrow against this value.

Why Use a HELOC for Debt Consolidation?

Using a HELOC can help in many ways:

First, Lower Interest Rates: HELOCs often have lower rates than credit cards.

Second, Simplified Payments: Combine multiple debts into one payment.

Third, Flexible Borrowing: Borrow only what you need when you need it.

Steps to Consolidate Debt with a HELOC

1. Check Your Home’s Equity

First, see how much equity you have in your home. To clarify, equity is the difference between your home’s value and what you owe on your mortgage.

2. Apply for a HELOC

Next, apply for a HELOC. Your lender will check your credit as well as your home’s value.

3. Use HELOC Funds to Pay Off Debts

Once approved, use the HELOC to pay off your high-interest debts. This might include credit cards, medical bills, or personal loans.

4. Make HELOC Payments

Now, focus on making payments on your HELOC. Since HELOCs usually have lower rates, you’ll save money.

Benefits of Debt Consolidation with a HELOC

Save Money

By lowering your interest rate, you save money in the long run.

One Monthly Payment

Keeping track of one payment is easier than juggling many.

Boost Your Credit Score

Paying off multiple debts can improve your credit score.

Things to Watch Out For

Variable Rates

HELOCs can have variable rates, which means the rate can go up.

Risk to Your Home

Since your home is collateral, you risk losing it if you don’t make payments.

Closing Costs

There might be fees to open a HELOC. Ask your lender about any costs.

Is a HELOC Right for You?

A HELOC can be a great tool for debt consolidation. But it’s not for everyone. Consider your financial situation and talk to a financial advisor.

Final Thoughts

Consolidating debt with a HELOC can simplify your finances and save you money. Remember to check your home’s equity, apply for a HELOC, and use it wisely. By keeping up with the payments, you will be able to  watch your debt shrink.

Contact Us Today!

Do you need help navigating your financial future? Contact us today!

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The Mortgage Approval Process

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Do you know what the mortgage approval process looks like? Well, here’s a snapshot:

The mortgage approval process is determined by three main factors:

  1. Credit score.
  2. Income/savings.
  3. How much money you put down on a house (or the loan-to-value).

The higher each factor is, the easier it is to get a loan. Why? Because there’s little to no risk for a mortgage company. You’ve proven you’re financially stable.

What if one of these three factors aren’t good? Well, you need to find a way to balance things out.

To learn more credit strategies and debt management, contact us!

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Monday Motivation – Fortune

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Friday Fun – Aliens

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90 Day Challenge: Improve Your Mind and Body—and Finances

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We’ve kicked off our 90-Day Challenge and it’s never too late to join.

The challenge is to pick an enjoyable activity and stick with it for 30, 60, or 90 days. The basic guideline is choosing an activity that’s fun, fast, and CHEAP. Reading, hiking, swimming, biking, writing—it can be just about anything as long as it doesn’t cost too much.

By taking a hike every day or reading a book each week, we set ourselves up for financial success—because we aren’t using our downtime to find random ways to spend our money. Instead, we give ourselves a healthy, enjoyable outlet to focus on.

Not only are we saving ourselves money by doing this, we’re also improving our minds, hearts, and/or bodies. Getting up and moving, learning something new, reaching a new goal—it’s all good for us! Bonus: we’re keeping money in the bank to use on more important things in life—like buying a dream home.

What are you waiting for? Give yourself a focused purpose this month, and you’ll quickly (and easily) break free of bad financial habits.

 

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