As oppose to credit card interest payments, interests paid on home equity loan and home equity line of credit may be tax deductible. As always, consult a tax accountant or the irs web site before taking such deductions.

Make an effort to change the spending habit’s that led to the high credit card debt. Converting unsecured credit card debt into a debt secured by your home can be very risky if not done properly. Too many trips to the home equity atm could leave you penniless and homeless.

With the new credit card minimum payments set to go up this year, you may want to consider consolidating them with a home equity line of credit or cash out refinance.

You basically have a couple of options to do a credit card debt consolidation. The first option is to refinance your 1st mortgage and roll the credit card debt into your main mortgage. This will normally provide you with a lower rate and overall better financing terms. Another option you have is to take out a fixed rate second mortgage or to take out a home equity line of credit to use to consolidate your credit card debt. This option is usually cheaper but you will most likely incur a higher interest rate than with a first mortgage. Both ways of credit card debt consolidation can be very beneficial to most consumers and they can offer many other benefit’s besides just your initial monthly savings.

The four most important factors regarding credit are: 1. Pay all of your bills on time. Know what bills report to the credit bureaus and which ones don’t. This will help to maintain a better credit rating. Do not let accounts go to collection. 2. Limit your balances on all revolving credit (such as home equity lines and credit cards) to approximate. 20-39% Of your credit limit. (If you have two credit cards with balances of $250 each and a limit on both of $1,000, this is ideal). Do not max. Out your credit cards and it is better to have small balances on three cards than to have one large balance on one card. 3. 2-4 Credit cards is the ideal number of open credit cards to have. Make sure that you do not close credit card accounts when you pay them off. Your length of credit history and how long you have had open accounts is a big factor in credit scoring. If you have a ton of credit cards, close the newer ones and leave the ones that have been open for a long open. 4. Credit inquiries – I know there is a myth that you should only let one company pull your credit when you are looking to buy something because every pull lowers your credit score. This is right and wrong. Watch how many people are pulling your credit because you don’t want to have numerous credit inquiries each and every month. However, when you are shopping for a mortgage, or anything for that matter, make sure you do all of your shopping around within a 14 day time frame because all mortgage related credit inquiries within this time frame will only affect your credit as though only one company checked your credit.

You can also obtain a home equity line of credit or a second mortgage in order to consolidate your credit card debt. These two options both offer tax benefit’s and can lower the interest rates that you are paying on the credit cards to a lower interest rate on a home equity line or second mortgage. Most times the rates on an equity line or 2nd mortgage will be lower because these are both secured by your home, whereas a credit card debt is not secured by anything.

You could consolidate your high interest credit card debt into a home equity line of credit. This way the interest you pay is tax deductible at the end of the year.

Remember that the way you manage your credit card balances affects your credit report. If you are not yet in a position to pay off credit cards through a home equity line or through refinancing, or if you are simply keeping your cards open afterwards, remember to carry a of no more than 50% of the account limit. This will help you maintain good credit scores.

You can consolidate your credit card debt through use of your first mortgage or by obtaining a second mortgage or a home equity line of credit, also known as a heloc. A heloc works with the same basic principals of a credit card. It is a revolving account that as you pay the equity line down, you have that money available to you to use again. With a second mortgage you simply have a set term (5 years, 10 years, 15 years, etc) that you will pay on the loan for and when it is paid off you are relinquished of your obligation to this debt and the account closes. All three (1st mortgage, 2nd mortgage or heloc) are excellent choices for debt consolidation but you and your mortgager broker will need to figure out which one makes the most sense for your particular situation.

When calculating debt-to-income ratios lenders will include the following things in your debt: your proposed mortgage payment; credit card payments; car payments; loan payments, including student loans; second mortgage payment or home equity line of credit payment; and payments for any loans you may have cosigned on, even if you are not the one making the payment. They will usually include student loan payments, even if you have not started making payments yet. They will usually not include payments on any account that has less than 10 monthly payments left. They will not include payments for any accounts that you are going to pay off before or at closing.