A survey conducted for FirstClose reveals that homeowners lack awareness regarding how home equity can be used to pay down higher interest credit card debt.

In March, FirstClose commissioned a third-party online survey of 1,000 homeowners who have lived in their homes for at least two years and who have at least two credit cards with outstanding balances. 

The survey asked consumers a series of questions about their knowledge of home equity loans and home equity lines of credit and on their willingness to use these products for different applications, such as consolidating debt, home improvement and to pay for major life events.

The findings suggest that there is significant lack of awareness among consumers regarding the financial advantages of leveraging home equity debt versus other kinds of consumer debt.

Nearly half of the respondents (44%) did not know what the interest rate was on their credit cards. 

In addition, a majority of respondents (77%) did not know what the average interest rate is on a HELOC. 

Of the respondents, 40% said they had more than $200,000 worth of equity in their homes and within that, 27% said believe they have more than $250,000 worth of equity.

When asked if they would access their home’s equity to pay off debt, the responses were almost evenly split with 49% responding yes and 51% responding no. 

More than half of respondents (56%) said they would access the equity in their homes for a home renovation project. 

Only 34% of respondents said they would access their equity to finance a big purchase, such as a car, a trip, tuition etc.

The survey revealed some misconceptions about home equity products. Nearly 40% did not know the difference between a closed-end home equity loan and a HELOC. 

About 37% of respondents mistakenly believed that if they

The post Survey: Many Homeowners Aren’t Aware They Can Use Equity to Pay Down Credit Card Debt appeared first on Appraisal Buzz.