Equity Home Loans - Is a home equity loan an ideal way to pay off credit card debt?

Is a home equity loan an ideal way to pay off credit card debt?

Ok, this is unconventional - My mom is disabled. Her home was affected by Katrina. Her home is finally fixed. However, during the past two years, she's accrued close to $100,000 in credit card bills to pay off some of the repairs since a lot the funds from the insurance and the government were not enough. Additionally, since she is disabled and receives little from the government, she has been unable to pay enough or on time. Her interest has gone up to 25-30% on 4 cards. I have good credit. I own a condo. I want to at least help her by getting a home equity loan (basically a second mortgage) even though I want to get a loan in a couple of years to buy a house. She's considered bankruptcy with Chapter 13 in order to not jeopardize her home, which she paid off with some of the funds received from Katrina. It seems she has no way out; and I hate to be in this situation from my own financial balance. What can be done? She needs serious help; and I don't want to jeopardize my credit.

Public Comments

A home equity loan is a terrible way to pay off a credit card. If the loan defaults, you will lose your home.
u did not state exactly where her home is--or its size. Often, people can economically save their home by using it for different reasons; like putting in an assisted care facility. [might be ideal for her if you can help coordinate.] or---she sells her house to you. With that cash, she pays off her debts totally. Then, you give her a "life estate." When you have paid off that mortgage, you then, buy whatever other home you want. Everyone wins and she can life in the home forever. YOU did not state where you want to buy your new home in 2 yrs or what you wanna pay for it..... but I am available to guide you [both]
The problem with getting a second mortgage to pay off the debt is that it is now your debt. This will be taken into consideration when you apply for a loan. I don't know how old your Mum is so I'm not sure if a reverse mortgage on her home is the right way to go either. I would talk to her bank, believe it or not they can sometimes be helpful, it's their money after all that they risk loosing if she declares bankruptcy. Best of luck.
It can be a good way to pay off excess debit.....but remember, you are basically putting your home up as the collateral.....you default on the loan and stop making payments and your condo belongs to the bank. You say that mom has paid her home off (if I'm reading this right), why doesn't she take a look at a reverse mortgage or take out a personal loan, putting her home up for collateral. I know you say she does not make much money, but you could possibly work with the bank and get her payments down where she could manage them.
Did I read it right: You want to get a home equity loan on your own condo to pay off your mom's credit cards? If so, then you'll be getting a loan and actually giving the cash to your mom. You need to be aware of "the gift tax" which affects gifts of more than $12,000 a year. Your credit won't be hurt as long as you make the payments on time. So my question is: "can you afford the payments?"
If you are a first time borrower of a home equity loan it is imperative that you have a checklist of essential questions that you need to ask each and every lender. The answers to these questions will provide a valuable reference to base your comparisons on. What’s the interest rate? Knowing this is crucial. The interest rate will determinepercentage by which the adjustable rate will change. What is the Annual Percentage Rate or APR? The APR on the home equity loan will determine the yearly payment you will need to make towards this.The higher the payment in terms of points, the lower is the interest rate.
Probably best to have a rest.looks like you can get some ideas here.http://homeloan.online-assistant.info/colorado-home-improvement-lender-loan-mortgage.html