Finance companies are pushing hard for your decision to use your
real estate as collateral for debt consolidation loans.
They are offering loans of up to 1 1/4 above the value of your
very careful. You may put yourself into a position where
you may loose your real estate. These loans are considered as mortgages on your real estate and if, for any reason, you get
behind, the creditor would have the right to foreclose on that mortgage.
In many cases, also, you may have no or not have enough equity in the real
estate to even be able to sell it. If you are near retirement, you
may end up having a house whose payments you cannot afford since
your income will usually decline upon retirements. Don't
lock yourself into a trap you may not be able to escape from,
even if you file bankruptcy.
Some companies are even offering loans where all you pay on your
mortgage is the interest for a set period of time (20 years) and
then pay a balloon payment of the principal after such
period. You end up never paying down the mortgage over
that period. You are still in debt after 20 years. And
they still have your house in case you can not pay the
mortgage. Again, be very careful!