| Focus | A homeowner decision |
| Review | Lender requirements apply |
Start with the balances you have
List each balance, current interest rate, required payment, and the date you expect to finish paying it. Separate promotional balances from ordinary rates. Decide whether your comparison assumes only minimum payments or a fixed monthly budget. These are different plans and can produce different results. Leave new spending out of the initial model so you can see what retiring the existing balances would require.
Keep the payoff horizon visible
For a hypothetical comparison, a homeowner could look at five years for both the existing debt and new borrowing, then separately consider a longer new-loan term. At the end of five years, compare payments made plus any remaining balance and upfront fees. A smaller payment is not the same as less debt. Our planning tool shows an assumed fixed-rate existing debt beside constant-rate and changing-rate new borrowing. It is not a simulation of every credit-card minimum-payment formula.
Understand the change in security
Using home equity to repay unsecured balances changes what is at stake if you cannot pay. The existing mortgage may still have its own payment. Review the complete household budget, not just the accounts being consolidated. The CFPB also discusses alternatives such as speaking with creditors and a nonprofit credit counselor. If the budget still requires borrowing for routine expenses, another loan may not solve the underlying problem.
Set a review point before you commit
Ask the broker to show the effect of fees, a higher future rate, and the repayment stage. Decide how the paid accounts will be used afterward and what cash reserve remains. Do not include a tax deduction or a credit-score improvement as an assumed benefit. Those outcomes are not established by moving the balances.
Prepare the next conversation
Use the home equity planning worksheet to organize your assumptions. Leave anything you do not know blank for discussion. The worksheet does not check eligibility or obtain a lender offer. You can request a broker conversation when you are ready to review your estimated home value, mortgage balance, and requested amount. Do not send account numbers or financial documents through a public inquiry form.
Read the source guidance. Provider examples describe that provider only. This guide is educational. A home-secured loan puts the property at risk if repayment fails. Program availability, documentation, costs, and approval depend on the lender and your circumstances.