Pay credit cards to the value?

by penny

I know many people who tried to "take themselves of debt recently.

It is logical at first glance, to repay your credit cards at 10% with a home loan at 6 or 7 percent. Especially if you're really in depth. And after all, you have all that home equity just sitting there.

First, your house is like a pig?

Second, a credit card has a higher interest rate becaues of the debt is not guaranteed. This means that there is no collatoral. If you don 't pay, they can not pick something to repay debt, as in a home or auto loan. You pay the higher rate in exchange for greater risk of the lender.

If you take your home to pay unsecured debt, you buy your way out of debt, putting at risk your home. YIKES!

In the case of a collapse of real estate like this, if you lost your job and selling your home, the amount of your mortgage balance and could end up being worth more than your home can sell at a price. A term is also known as "underwater."

Think about it if you are tempted by lower rates on loans now. On loan to get the debt does not work. Dave Ramsey, I heard last night on television that no one has ever dug out of a deep hole. Meaning for me. A lot of work, cost reduction and budgeting is still the major route out of debt.