I have recently become a homeowner, Thank the Good Lord. Along with becoming a new homeowner, I have been recieving offers in the mail to borrow up to 125% of my home's value to pay off bills, take a vacation, etc... I am kinda perplexed(sp?) by these offers. It is not the first time I have seen these offers, I recieved them regularly living in my apartment-LOL, no equity needed.

So here is my question:

Is there a no-equity or 125% loan that is worth it if I am looking for a lower monthly payment and one bill? Any without prepayment penalties?

I have about 18k in CC on two cards. I called one CC with a 11k balance and got them to lower the rate to 12.99% - but MBNA bought their CC accounts so I don't know what is going to happen to that rate. The other has 7k and a rate that will change to 17.99 in Sept. I can make my monthly payments but I am not making a whole lot of headway. I do realize that I would be just paying for it longer over time if I went with a 125% loan. Should I consider a no equity loan if there is a good one out there or just keep searching for a lower interest rate CC who will take both my balances? I did miss some CC payments back in 1995, but I haven't missed one since.

I personally have great concerns about home equity loans. Essentially you are pledging your house (whose value you've already borrowed against) as collateral for the credit card debts. If you don't make the extra payment that comes with the 125% first mortgage or the home equity loan payment, you could possibly lose your house. Plus, it frees up your credit cards to build up balances again.

Better to keep the cards separate and pay them down. Look for lower rate cards to reduce your payments rather than tapping into your home's equity.

Just my two cents. Hope it helps.