Using Home Equity to Pay Off Debt
Find out how to make your equity work to your advantage with home equity solutions from Flagstar Bank.
When you buy a home, your down payment and monthly mortgage payments build equity, the percentage of the home that you own. It’s the home’s current value minus the amount you still owe on it. You can access this equity to pay for major expenses, such as using home equity to pay off debt. Scroll through our infographic to learn about home equity loans and lines of credit. Then, use our Consolidating Debt with Home Equity Calculator to crunch the numbers for your situation to see if you can save with a home equity solution from Flagstar Bank. At Flagstar, a dedicated banker will guide you to the right plan to reduce debt and control your financial future.

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Home Equity Loans
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Use the equity built in your home to benefit your financial plans for the future.
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Why Borrow From Your Equity?
Consolidate debt
Interest can be tax-deductible
Pay for large expenses like renovations and education
More flexible than ordinary loans
Kinds of Borrowing
Home Equity Loan
Pro
One lump sum payment:
The full amount of your loan will
be disbursed to you at once.
Cons
Interest rates:
The interest rate is fixed, so it may
be slightly higher than a HELOC.
Home Equity Line of Credit
Pro
Flexibility:
Borrow from equity like a credit card—when you like, for how much
you’d like—usually for an agreed upon duration (avg. 10 years).
Con
Timed:
Once the draw period is over, you’ll lose access to your loan in order to
pay back interest and principal over an agreed-upon period of time (avg. 15-20 years).
Things to Know About Using Your Home Equity
Tied up in real estate values: if the market falls, so does your equity
Stable income is necessary for repayment periods
Fluctuating interest rates determined by market and economy
LOGO: FLAGSTAR BANK
Whether you’re curious about using HELOC to pay off credit cards or a home equity loan to pay off debt of other kinds, we’re ready to walk you through all your options. Get in touch with a Flagstar banker today.
You may also be interested in:
Programs for qualified borrowers. All borrowers subject to credit approval, underwriting approval and lender terms and conditions. Programs subject to change without notice. Some restrictions may apply. Not a commitment to lend. A loan advisor will review and provide you the terms, conditions, disclosures, and additional details on the interest rates that apply to your individual situation.