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Should you use home equity to pay off debt before the holidays? What experts say
Home prices have surged over the last few years, giving homeowners a valuable asset: equity. The average American homeowner now holds almost $300,000 in home equity — which they can access through home equity loans and lines of credit for major expenses or debt consolidation.
With holiday spending around the corner and credit card rates near 24%, many homeowners are eyeing their equity as a debt solution. Home equity loans and home equity lines of credit (HELOCs) are offering attractive rates in the mid-8% range. But financial experts warn this strategy isn’t right for everyone. Here’s what you should know about using home equity to consolidate high-interest debt now.
Find out how affordable home equity borrowing can be now.
Should you use home equity to pay off debt before the holidays? What experts say
“One of the biggest advantages to [homeownership] is access to more tools, including home equity loans and lines of credit to manage financial wellbeing,” says Debbie Calixto, sales manager at loanDepot. “When done responsibly, consolidating debt before the holidays can create breathing room.”
But in the long run, this only works if you’ve addressed the root cause. According to Andi Wrenn, a member of the board of directors for the Association for Financial Counseling, Planning Education (AFCPE), many homeowners fall back into debt within a year because they haven’t changed their spending habits (only now, their home is on the line).
With that in mind, let’s explore when tapping into your home equity makes sense for debt consolidation — and when you might want to consider other options.
Compare the top home equity borrowing rates available to you today.
When it would make sense to use your home equity to pay off debt now
It could be wise to pay off debt with your home equity if you’ve already improved your spending habits. By doing so, “[you] can lower your overall cost of borrowing,” highlights Calixto.
Converting high-interest credit card debt to a lower-rate HELOC or home equity loan could mean significantly smaller monthly payments.
Assuming you can make loan payments on time and handle end-of-year expenses, doing this now can be particularly beneficial.
“Starting the new year without debt can be a huge financial and mental boon,” notes Michael Micheletti, chief communications officer at Unlock Technologies, an Arizona-based financial company.
Success with home equity borrowing starts with understanding your finances. Wrenn recommends tracking every expense for at least a month and creating a detailed budget before considering this option. This ensures you can handle the new payment structure and avoid falling back into debt patterns.
When it wouldn’t make sense to use home equity for debt consolidation
“I wouldn’t recommend tapping into [your home equity] if you’re planning on reaching back in your wallet for your credit card to pay for holiday gifts,” warns Calixto.
Simply moving debt around without fixing poor spending habits can put your home at risk.
Another obstacle to consider is timing. Micheletti explains that accessing home equity can take several weeks or months. Many homeowners find themselves stuck in limbo, waiting for approval while bills keep piling. In this case, it may not be realistic to pay off debt this way before the holidays.
3 alternative ways to manage high-interest debt
Tapping into your home equity isn’t the only way to manage high-interest debt if you decide it’s not the best option.
Calixto and Micheletti suggest the following proven alternatives:
Debt snowball method
Start by listing your debts from smallest to largest, ignoring interest rates. Then, “make the minimum payment on all debts except the smallest,” Calixto advises. If you have extra funds after paying the minimum, apply them to the smallest one until it’s paid off. This approach builds momentum as you clear each debt.
Balance transfer cards
If you have strong credit, “[consider] a balance-transfer card with a zero, or very low, interest rate,” suggests Micheletti. Be sure you can pay off the transferred balance during the promotional period (usually around six to 20 months). Otherwise, this may backfire as interest rates skyrocket after that.
Professional guidance
Tackling debt can be overwhelming, especially when you have lots of it. When in doubt, seek help from a financial advisor who can create a personalized debt payoff plan.
The bottom line
“When considering tapping into your equity, ensure you’re comfortable with your loan terms and confident in your ability to repay,” stresses Calixto. Your next steps include tracking your monthly spending and meeting with a financial advisor to review your debt consolidation options. If you’re struggling with debt but have a solid repayment plan, compare offers from top home equity lenders.
Finally, Calixto reminds us that the home secures the HELOC or home equity loan. “[That’s] why rates are typically more favorable than unsecured debt,” she says. “You don’t want to do anything to jeopardize the roof over your head.” Make sure your decision moves you toward long-term financial wellness — not short-term relief.
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Can the murder of JonBenét Ramsey be solved by 7 items of evidence?
The details of the murder are still shocking today, nearly three decades later. On Dec. 26, 1996, the 6-year-old daughter of John and Patsy Ramsey, a well-to-do couple living in Boulder, Colorado, was found dead in the family’s basement. JonBenét Ramsey, an outgoing child who performed in local beauty pageants, had been bludgeoned and strangled.
It is a story I began covering for “48 Hours” in 1999 and will return to in “The Search for JonBenét’s Killer” airing Saturday, Dec. 21 at 10/9c on CBS and streaming on Paramount+. The program is a look back at how we covered the case in 2002. It’s a television time capsule, allowing viewers to hear Patsy and John Ramsey talk about their daughter and how her death and the following investigation upended their lives.
Shortly before 6 a.m. on the morning after Christmas, Patsy Ramsey called 911. She had awakened, she later told police, to find her daughter missing and a two-and-a-half-page note left on the stairs demanding a $118,000 ransom.
Despite a written warning not to notify anyone, the Ramseys called Boulder police, who searched their home and recommended the family wait for a call from the kidnappers. Later that day, a Boulder detective suggested John Ramsey and a family friend look through the home to see if anything looked out of place. When John Ramsey entered a room in the basement, he found his daughter dead on the floor, with a white blanket over her body and duct tape across her mouth.
The tragic discovery of the child by her own father, after officers had already searched the home, was the beginning of a yearslong, error-plagued investigation. JonBenét Ramsey’s murder was the first homicide that year in Boulder.
The case, after the acquittal of football star O.J. Simpson, immediately became the next international media sensation. Pictures of the photogenic 6-year-old competing in child beauty pageants appeared in the tabloids, while armchair detectives filled the airwaves, debating the contents of the ransom note.
Unidentified male DNA was left on the child and tests, performed just weeks after the murder, excluded anyone from the Ramsey family, including JonBenet’s 9-year-old brother Burke. Those results were initially kept from the press and public as investigators continued to focus mostly on John and Patsy Ramsey as suspects in their daughter’s murder.
While the couple gave DNA, hair, blood and writing samples in the days following the murder, they hired attorneys and didn’t speak to investigators until several months later, in April 1997, and again in June 1998. Video from that 1998 interrogation, aired publicly for the first time by “48 Hours,” shows a combative Patsy Ramsey denying any involvement in her daughter’s murder. When told that investigators had scientific trace evidence linking her, she responded, “That is totally impossible. Go retest.” She then added, “I don’t give a flying flip how scientific it is. Go back to the damn drawing board. I didn’t do it. John Ramsey didn’t do it. So we all got to start working together from here, this day forward to try to find out who the hell did it.”
In 2008, after more DNA tests again excluded the Ramsey family, the Boulder District Attorney at that time, Mary Lacy, publicly exonerated the Ramseys and sent them a letter of apology.
Investigators considered the theory that JonBenét may have been killed by an intruder, and over the years, looked at other persons of interest, including a neighbor who played Santa Claus and at least two people who confessed to the murder.
The only arrest in the case was made in 2006 after a man living in Thailand by the name of John Mark Karr claimed to have drugged, sexually assaulted and accidentally killed JonBenét. No drugs, however, had been found in the child and Karr’s DNA did not match what was left at the scene. Karr was later released.
Patsy Ramsey never lived to see the Boulder district attorney’s apology or have her name cleared. In 2006, she died, at age 49, of ovarian cancer. But John Ramsey, who remarried in 2011, has continued to push the Boulder police to find and arrest his daughter’s killer.
If JonBenét Ramsey had lived, she would have turned 34 years old in August. In an interview with “48 Hours” in November, John Ramsey said he can’t imagine his daughter as a grown woman, but only as a 6-year-old. He said he is confident that the unknown male DNA profile in the case will ultimately lead to a suspect in her murder. He is asking investigators in Boulder to turn over that DNA to an independent private lab that can employ the same technology, genetic genealogy, that was used to identify the Golden State Killer in 2018, and countless others since.
Ramsey also said there are seven items of evidence from the family’s home that could still be tested for DNA including, he said, the garrote used to strangle JonBenét, a rope found in a guest bedroom, as well as a blanket. The Boulder Police Department, however, in a release in November, disputed Ramsey’s contention that they are not testing evidence.
“The assertion that there is viable evidence and leads we are not pursuing—to include DNA testing — is completely false,” read a Boulder Police statement. Still, in a nearly six-minute video that was also released, the current Boulder Police Chief Stephen Redfearn admits, “there were things that people have pointed to throughout the years that could have been done better and we acknowledge that is true.”
John Ramsey, who turned 81 in early December, has lived under a cloud of suspicion for nearly three decades, but he said the weight of constant public scrutiny was nothing compared to the loss of his child.
“It was just noise level stuff,” Ramsey said, “We were so devastated and crushed by the loss of JonBenét … it didn’t matter … it didn’t matter.”
He is speaking out now, he said, because an arrest in the case would finally give some peace to his son Burke, now in his 30s, and his two older children from his first marriage.
“… identifying the killer,” he said, “isn’t gonna change my life at this point, but it will change the lives of my children and my grandchildren. This cloud needs to be removed from our family’s head and this chapter closed for their benefit.”
In addition to fighting to keep his daughter’s case in the public eye, Ramsey is working to see the passage of The Homicide Victims’ Families’ Rights Act, which would allow a murder victim’s family to request a federal review of their case.
“That would be a huge step forward to fix a fundamental problem in our system in this country,” Ramsey said, “not a complete solution, but it’s a step forward.”
CBS News
7-year-old girl killed, 6 other people wounded in stabbing attack at school in Croatia, police say
A 7-year-old girl was killed and at least five other students and a teacher were wounded in a knife attack at a school in the Croatian capital, Zagreb, on Friday, police said. The local hospital said the wounded teacher had suffered life-threatening injuries, Reuters reported.
Officials said the attack happened at 9:50 a.m. local time at the Precko Elementary School in the neighborhood of the same name. They described the attacker as a “young male” and said he had been detained.
Croatia’s Interior Ministry said the attacker was 19 years old. Local media reported the attacker was a former student at the school, and showed video footage of children running away from the school building and a medical helicopter landing in the schoolyard.
Croatian Prime Minister Andrej Plenkovic said he was “appalled” by the attack, and that authorities are still working to determine exactly what happened. He said several children have been taken to various hospitals in Zagreb.
State television reported the attacker went straight into the first classroom he found after entering the school, where he attacked the students and their teacher.
School attacks are rare in Croatia. Last May, a teenager in neighboring Serbia opened fire at a school in the capital Belgrade, killing nine fellow students and a school guard.
CBS News
Malaysia agrees to launch new search for MH370 plane, which vanished a decade ago with 239 people on board
Malaysia announced on Friday it has agreed to launch a new search for Malaysia Airlines flight MH370, which disappeared 10 years ago in one of aviation’s greatest enduring mysteries.
The Boeing 777 carrying 239 people disappeared from radar screens on March 8, 2014 while en route from Kuala Lumpur to Beijing.
Despite the largest search in aviation history, the plane has never been found. Malaysia’s prime minister said 17 days after the plane disappeared that, based on the satellite data, his government had concluded that the plane crashed down in a remote corner of the Indian Ocean, and that there were no survivors.
Transport Minister Anthony Loke said Malaysia had agreed to a new search operation by maritime exploration firm Ocean Infinity, which also carried out an unsuccessful hunt in 2018.
The company’s first efforts followed a massive Australia-led search for the aircraft that lasted three years before it was suspended in January 2017.
Loke said a new 5,800 square mile area of the southern Indian Ocean would be scoured by Ocean Infinity, which is based in the United Kingdom and United States.
“The new search area proposed by Ocean Infinity is based on the latest information and data analysis conducted by experts and researchers,” Loke said.
“The proposal for a search operation by Ocean Infinity is a solid one and deserves to be considered,” he told reporters.
The government said it agreed to Ocean Infinity’s proposal “in principle” on December 13, with the transport ministry expected to finalize terms by early 2025.
The new search will resume “as soon as the contract is finalized and signed by both parties”, Loke said.
“They have informed us that the ideal time for the search in the designated waters is between January and April. We are working to finalise the agreement as quickly as possible,” he added.
“I truly hope there will be an end to the loss of MH370. May all questions be answered,” Malaysian Rosila Abu Samah, 60, the stepmother of one of the passengers, told AFP.
Malaysian Shim Kok Chau, 49, whose wife was a flight attendant on the ill-fated flight, said he had come to accept her fate but hopes to know what happened to the plane, “why it happened and who did it.”
Among the other victims was a celebrated group of 24 Chinese calligraphy artists coming from an exhibition of their work. Two young Iranian men on the plane, 18-year-old Pouria Nour Mohammad Mehrdad and 29-year-old Delavar Seyed Mohammadreza, were traveling on stolen passports to seek better lives in Europe.
Two of the U.S. citizens on the plane were young children, Nicole Meng, 4, and 2-year-old Yan Zhang.
Philip Wood was the only American adult on the flight. The IBM executive had been living in Beijing and was planning to relocate to the Malaysian capital with his girlfriend, Sarah Bajc.
“No find, no fee”
The new search will be on the same “no find, no fee” principle as Ocean Infinity’s previous search, with the government only paying out if they find the aircraft.
The contract is for 18 months and Malaysia will pay $70 million to the company if the plane is found, Loke said.
He said the decision to agree to a fresh search “reflects the Malaysian government’s commitment to continuing the search operation and providing closure to the families of the MH370 victims.”
The original Australia-led search covered 120,000 square kilometers in the Indian Ocean but found hardly any trace of the plane, with only some pieces of debris picked up.
In July 2015, an airplane fragment later confirmed to be a flaperon from MH370 was found washed ashore on the western Indian Ocean island of Reunion. It was the first hard evidence that the plane had gone down in the area. More debris was later found washed up on the coast of eastern Africa.
The plane’s disappearance has long been the subject of theories — including that veteran pilot Zaharie Ahmad Shah had gone rogue.
A final report into the tragedy released in 2018 pointed to failings by air traffic control and said the course of the plane was changed manually.
Asked if he was confident the plane will be found during the new search, Loke said: “At this point, no one can provide guarantees.
“It has been over 10 years, and it would be unfair to expect a concrete commitment. However, under the terms and conditions, any discovery must be credible. It cannot just be a few fragments; there are specific criteria outlined in the contract.”