Mortgage Rates For January 24, 2024: Taking Out a Home Equity Loan for Debt Consolidation
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If you’ve gotten into debt, or if you’re trying to get your finances together to make another move in future years, you’ve likely considered debt consolidation. Debt consolidation describes the practice of taking out a loan to pay down debt, then repaying that loan through a series of monthly payments.
First-time homebuyers often pursue debt consolidation to pay down credit cards, get their debt in order, and improve their credit scores. For homeowners already established in homes, however, it’s possible to get a better rate on a loan by using the equity of the existing home. This means pursuing a home equity loan or a cash-out refinance to pay down debt.
30-year mortgage interest rates +0.02%
The average daily mortgage interest rate for Wednesday, January 24, 2024 is 6.95% for a 30 year fixed rate. The rate rose 0.03% from yesterday and rose 0.27% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Lenders in the freerateupdate.com network are currently offering rates as low as 6.0% (6.2% APR) on a 30-year fixed-rate mortgage. Receive a rate up to 0.95% lower than today’s average 30-year mortgage rate if you qualify. ⓘ
15-year mortgage interest rates +0.02%
The average daily mortgage interest rate for Wednesday, January, 2024 is 6.32% for a 15 year fixed rate. The rate rose 0.02% from yesterday and rose 0.27% from December 2023. This information is sourced daily from correspondent, retail, and wholesale lenders located in the United States.
Lenders in the freerateupdate.com network are currently offering rates as low as 5.0% (5.3% APR) on a 15-year fixed-rate mortgage. Receive a rate up to 1.32% lower than today’s average 15-year mortgage rate if you qualify. ⓘ
What To Know About Home Equity Loans For Debt Consolidation
Whether to pursue a home equity loan for debt consolidation depends upon your situation. If you got behind and lived on credit cards because you were without a job for a year, but you’ve recently acquired a new job, a home equity loan for debt consolidation might be a wise idea. With your new, stable job, you can make things a little easier on yourself and catch up with a home equity loan – especially if your new job makes payments on the home equity loan easy.
Remember: most people who take out home equity loans still have payments on their original mortgage. That means you’ll be paying your mortgage, plus an additional home equity loan. These are two separate payments.
However, if your home is paid off, you’ll only have to worry about the home equity loan and other non loan payments, such as taxes.
The Pros and Cons of Using a Home Equity Loan For Debt Consolidation
Using a home equity loan for debt consolidation has advantages and disadvantages. Generally, you can get a lower interest rate on a loan if you’re using your home as equity. Additionally, any debt consolidation payment might be easier for you than making dozens of smaller payments through the month.
On the other hand, you’ll face some limits on your loan, you’ll increase your debt, and there’s a lot at stake if you default on your loan: you could lose it. In most situations, though, the risk isn’t major. If your home has two working adults, it may be less likely that you’ll get behind on payments.
