Home equity can be a homeowner's greatest asset as well as a great source of cash. Often homeowners access their equity through second mortgage loans to remodel existing homes, to purchase other properties, or to pay off debt. If you are thinking of paying off debt with a second mortgage loan, consider these benefits.

• Interest paid on second mortgages may be tax deductible, whereas credit card interest is not. Homeowner's mortgage interest is a substantial tax deduction available to taxpayers who itemize their deductions on a 1040 Schedule A, and second mortgage loan interest is generally an allowable tax deduction as well.
• Second mortgage interest rates are usually less than credit card interest rates. Credit card companies can charge over twenty percent for interest on credit card debt, while the interest rate on second mortgages is typically much lower because the loan is secured by a property and there is less risk to the lender.
• Using a second mortgage loan to pay off debt can even help your credit scores. Having a lot of credit cards with high outstanding debt can lower your credit scores. Using a second mortgage to restructure this debt can improve your scores dramatically by freeing up available credit.
• The costs are much cheaper than a refinance of your first mortgage; lenders offer low and no-cost second mortgage loans and lines and, borrowers can save thousands of dollars in refinancing fees.

If a second mortgage sounds like a viable option for gaining control of debt, there are two different types of seconds to choose from. A home equity loan is a fixed rate second mortgage that is fully amortized (ie., you pay a principle and an interest payment). Fixed rate seconds may be priced lower than home equity lines of credit and they offer payment stability which many borrowers prefer. The terms are usually "30 due in 15", which means the payment is amortized over thirty years but the balance is due in fifteen years--creating a balloon due in 15 years, which may be paid off or refinanced.A home equity line of credit is a revolving credit line, allowing you to draw funds up to your pre-approved limit as needed. You can pay it off and reuse it over and over during the initial drawing period. The rate is adjustable, based on the prime rate, and the payment depends on the rate and the balance and may change from month to month. Generally, the drawing period ends after the first ten years, after which the loan must be fully amortized and paid off over its remaining life--no additional increases to the balance are allowed. Lenders are now offering borrowers the opportunity to fix the interest rate on all, or a portion, of the amount drawn, offering stability to a borrower's monthly payment

If one of these second mortgage products sounds right to you, start shopping for your second mortgage or HELOC. Lenders online or in person are ready to help you determine which loan is best for you and how much you qualify for. Qualifying for a second mortgage, and your interest rate, will depend on how much you want to borrow, your available equity, your credit scores, your income, and your assets.

So, if you need to get out of debt, look into some form of a second mortgage—an alternative to high interest rates and non-tax deductible payments from your credit cards.