Home Equity Loans and Home Equity Lines of Credit, sometimes called a HELOC, are a type of loan many individuals use to consolidate their high interest credit card debt.  This type of loan may make sense for individuals that still have a relatively high credit score and documentable income to support the amount of the loan they are applying for.  Typically, an individual or married couple can borrow up to 80% of the appraised value of their home in this type of refinancing option.  In some cases, Veterans of the US Armed Services may be able to refinance their mortgages for up to 100% of the appraised value of their home.

In a Home Equity Loan, or cash out refinancing of your current mortgage, a borrower may refinance their current mortgage and take out the difference of up to 80% of the appraised value of the home, less the current outstanding mortgage balance.  In this type of loan, the money may used for virtually any expense.  In a Home Equity Line of Credit, the borrower is given a line of credit, secured by their home.  The amount of the credit line can be up to 80% of the appraised value of the home, less the current amount owed in most states.  The borrower can draw against this line of credit and repay the loan by making monthly payments in accordance with the loan terms.

Keep in mind that you are placing your home at risk of foreclosure if you are not able to repay the loan amount in accordance with the terms of the loan agreement.  You should check the local laws in your state carefully before considering this option to refinance unsecured credit card debt.  In some states, the foreclosure process, once started, can progress rapidly and only lasts a few months.  In other states, the process can take much longer; providing some time to become current on your payments should you fall behind.