If you own a home and are looking for a way to reduce your debts, then you are one of the lucky.
By using your house as collateral, you qualify for many low interest rate options to consolidate your debts.
You should make yourself familiar with the three different types of debt settlement negotiation plans available to home owners.
The first home loan is a second mortgage loan.
How this debt settlement negotiation program works is that you take out a separate mortgage than your first.
What you should be aware of are the risks involved.
These plans usually have a higher interest rate and the term is less than your original, but can use this money to roll all your financial obligations into one much lower monthly payment.
The next option is to an equity loan.
This plan takes out a large sum of money from the existing equity that's already in your house.
For instance, if the value of your residence is $100,000 and you owe $50,000, then you can safely borrow up to $50,000 as equity.
In essence, you can use that $50,000 to pay off all your financial obligations leaving you with one lower rate, which you can also deduct from your taxes.
The third alternative to reduce your financial obligations is to use an Equity Line of credit, which is essentially, is a way for you to borrow money from the equity of your house.
Instead of one large loan like a regular equity plan, this program allows you to draw funds from your original mortgage as you need it and as much as the maximum limit available to you.
Each of the, above, choices are fairly easy for you to use to get when searching for ways to get your financial obligations under control.
Just remember, which ever borrowing plan you go with, you are using your house as collateral and if you fail to make your payments, you risk losing your residence.