August 22nd, 2025 2:59 PM by Ken Morley
Many homeowners find themselves juggling multiple debts—credit cards, auto loans, personal loans, or medical bills. Each comes with its own due date, interest rate, and stress. One way to simplify your financial life and potentially lower your monthly payments is by consolidating debt using the equity in your home.
Home equity is the difference between your home’s current market value and what you still owe on your mortgage. For example, if your home is worth $450,000 and your mortgage balance is $300,000, you have $150,000 in equity. That equity can be tapped into through a cash-out refinance or a home equity loan/line of credit (HELOC).
When you use home equity for debt consolidation, you borrow against your home and use the funds to pay off higher-interest debt. Instead of making multiple payments at different rates, you’ll have one payment—often at a lower interest rate than credit cards or unsecured loans.
Lower interest rates compared to credit cards and personal loans.
One monthly payment instead of several.
Potential tax advantages if structured as a mortgage loan (consult a tax advisor).
Improved cash flow with reduced monthly obligations.
Debt consolidation using home equity isn’t a one-size-fits-all solution. It’s best for those who:
Have significant equity in their home.
Are carrying high-interest debt.
If done wisely, it can be a powerful way to get control of your finances and work toward a debt-free future. There is no cost or obligation to explore your options. Give us a call today at (303) 650-9400!