A Home Equity Loan to Consolidate Debt Jasmine currently has three credit cards with outstanding balances that total $15,000. Her minimum monthly payments on these cards total $350. Jasmine’s home is currently worth $120,000 and she has a mortgage of

$80,000.

1. How much can she borrow on her home if the lender is willing to lend a maximum of 80 percent of the market value?

2. How much will the monthly interest-only payment be on a home equity loan at 6 percent interest only?

3. If Jasmine decides to take a home equity loan, explain why she should make larger payments and pay both interest and principal.