There are degrees of debt. You do not have to wait until you are in a situation where your only option is bankruptcy or foreclosure on your home. Instead, you can take action now to eliminate those problem lines of credit. With a debt consolidation home equity loan you have the option of paying off debts that are becoming unmanageable. There are words of caution we want to offer in this situation though. First, you have to be able to obtain the debt consolidation home equity loan. Second, you need to realize this will give you a second home loan.
Are you prepared to have a second mortgage on your home? Is this the best option for your situation? Most individuals think a debt consolidation home equity loan is their best alternative. It is a secured loan therefore you have a better interest rate than regular debt consolidation loans. The downside is that your home is now in the control of one or two different banks. If you default on either of the mortgages you could lose your home in foreclosure.
You will have to calculate the risks a debt consolidation home equity loan possesses against the risk of not going for the loan. If you find the risks are worthwhile, you can begin the procedure of finding the right debt consolidation home equity loan. The bank you have the first mortgage on may be unwilling to lend you another loan. If this is the case you need to research the other banks.
Since 2007, US banks have been failing quite often. Larger banks like Wells Fargo and Bank of America have worked to buy up the smaller banks and even some of the well known banks. As a result it has made obtaining a home equity loan a little tough for some individuals. Research the banks to see which ones are more willing to offer a debt consolidation home equity loan. Are you receiving any offers in the mail? If so, are these offers really worth looking into or do you find them too expensive? By answering these questions you can find the right path.