High-Interest Debt: A Way Out
With credit so readily available in today’s market,
it is no wonder that many consumers find themselves
in trouble with their credit card bills. As introductory
rates expire and balances balloon, many home owners
find themselves unable to make more than the minimum
payment each month. This kind of debt elimination strategy
is not effective.
Taking out a second mortgage loan can be an effective
way to stop having to pay interest rates that can range
as high as 15 per cent or more. Many consumers have
not just a few, but several high balance, high interest
credit card accounts. No one sets out to go into debt,
but unfortunately the number of Americans doing so has
continued to soar in recent years. While the cause of
the problem can probably be attributed to a variety
of factors, the solution for many consumers is to take
out a lower interest, tax friendly second mortgage.
Taking out a second mortgage loan on your home is a
big decision, and not something to be done lightly.
But it is not difficult to see the advantage of making
one payment at an interest rate of around five per cent
or even lower, rather than paying 15 per cent interest
on your debt and having to make several monthly minimum
balance payments that do not even begin to put a dent
in what you owe.
For many consumers, taking out a second mortgage loan
as a strategy to deal with high interest debt is also
a good idea from a tax standpoint. Though everyone’s
situation differs, many consumers are able to deduct
the interest costs of their second mortgage loan.