Use Florida Home Equity to Consolidate Debt

So you’re saddled with debt, possess a poor credit score and are afraid about the type of Florida home loan you can receive as a result? You’re not alone. But here are two methods to help you take care of this financial concern.

1. Take advantage of your home equity: You can use your home to pay off debt in a couple of ways: by getting a cash-out refinance or by getting a home equity loan to consolidate your debt. If you refinance, you take a loan for more than the balance of your existing mortgage so that you have extra cash to use toward paying off debt.

If you have a home equity loan, you take a second loan (on top of your existing mortgage) using your home’s equity as collateral and receive cash in return for it. You still have to be careful to shop around for a reputable lender who will help you make the right decision and get the right Florida home loan for your situation.

2. Check your credit report: Regardless of whether you have lots of credit card debt or not, you should always check your credit report as often as you can.

There are three credit reporting bureaus: Experian, TransUnion and Equifax. Each of these collect information on your credit history and each has a score that rates you on your credit-worthiness (how risky you are as a borrower). The information between these three may be different, thus they may score you differently. And you may have to pay a small fee for it (about $15 for one report or about $40 for all three), but it’s well worth the cost.

Knowing if there are discrepancies or inaccuracies can help you get them clarified and may perhaps improve your score; which in turn, will help you give you better options on which Florida home loans you qualify for. It will also help to protect you against identity theft. If you happen to be a victim, checking your report can help you catch it early and avoid bigger headaches and problems later on.

At the end of 2006, everyone will be able to get a free report from each of the three credit reporting bureaus annually, under the Fair and Accurate Credit Transactions Act of 2003.

If you are careful with managing your debt, you can only help yourself in the long run. You may need to apply for a no-cost Florida home loan or you may be able to improve your credit through these methods.