“Let the good times roll” might be the perfect tagline for credit card companies financing consumer debt in 2022.
The average credit card interest rate carrying charge is 19.2%, according to Money Geek. The average annual percentage rate or APR for a credit card cash advance is 25%. California homeowners took out more than $11 billion in HELOCs in the third quarter of 2022, according to Attom Data Solutions. In our region, Los Angeles County accounted for 9,865 new HELOCs, Orange County had 4,518, Riverside County 2,830 and San Bernardino County had 1,886, says the ATTOM report.
So, let’s compare payments. For $30,000 of credit card debt racking up 19.2% in interest payments, a minimum interest-only payment would be $480. Switch to a HELOC interest-only rate at 8.75% and the payment shrinks to $219. While the term is typically 30 years, borrowers can cut that down incrementally.
For example, a borrower can get up to 90% cash-out on a second in the mortgage broker community. Depositories tend to be far more conservative. For self-employed borrowers. you can also get a $1 million second, qualifying on bank statements. Depositories don’t entertain income based on net bank deposits.“Mortgage interest that is deductible is related to “buying, building or substantially improving your home. You cannot deduct mortgage interest to pay off credit card debt,” said Dr.