Meet the Street: The Benefits of a Home Equity Loan

As mortgage rates have hit 40-year lows, refinancing has been all the rage. But experts such as financial adviser James R. Cotto say consumers also should seriously consider consolidating debt through home equity loans.

James R. Cotto, Managing Director, Cotto & Padovani

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Trading Psychologist Dr. Thomas J. Ferraro

Penn Law School's Jeff Brotman

Cotto, the managing director of Cotto & Padovani, isn't in favor of betting it all on the ranch, so to speak. But with credit cards sporting annual interest rates as high as 21% and home equity loans charging in the neighborhood of 3.75% to 6%, Cotto believes that consolidating debt through a home equity loan or a second mortgage makes tons of sense. Plus, he notes, you can write off interest on a home equity or second mortgage loan, which you can't do with the interest you pay on credit cards. ...