Is it a good idea to use credit cards as a method to reduce my mortgage payment using a 0% for 1 year then transfer the balance to another at the end of the year and so on and so on??
2007-02-10 12:06:29 · 6 answers · asked by chaos3eleven 1 in Business & Finance ➔ Personal Finance
If you are able to manage the payments and are not doing this as a means to make payments but as a strategy to pay less interest overall then it is brilliant. It's difficult to do properly and easy to get complacent. Stay diligent to your plan and you can save some good money doing so.
2007-02-10 12:11:14 · answer #1 · answered by fade_this_rally 7 · 1⤊ 0⤋
Card Transfers are the biggest scam the credit card companies have. The 0% interest entices you to roll balances onto their card, then they wait. They bank on the idea that you'll get into a comfort zone and NOT pay the balance off. Then they sock you with an insane rate. Then you're paying the mortgage interest AND the credit card interest.
The idea sounds good on paper. But what happens if you forget to roll the balance? Or you DON'T have another 0% to roll to...You're screwed.
You could get another mortgage with a better rate. But then you're starting at 30 years again. Plus, if you crunch the numbers..are you really saving? After the fees you pay to get the new mortgage and the new payments....are you?...In the long run the answer is usually no way.
The best thing you can do ( if you can) is pay a little extra on each payment. This will knock down the principle. If you pay an extra monthly payment each year, you can knock down your loan term FIVE YEARS. Most lenders don't have a prepayment penalty....it would be foolish....they're getting their money back
2007-02-11 09:02:53 · answer #2 · answered by phillyvic 4 · 0⤊ 0⤋
This is a double edge sword. Yes and no. Yes because you could save thousands of dollars on your loan by purchasing points. But if your credit is strained and you cannot keep transfering the balance to zero you will end up paying a higher intrest rate, that is not tax deductable, than your mortgage.
2007-02-10 22:16:34 · answer #3 · answered by Margaret R 1 · 0⤊ 0⤋
No it isn't. New cards will lower your credit score BIG time...the proportion of balance to high credit goes up...and your time with established credit on cards with balances drops.... Those are HUGE score factors.
2007-02-10 20:10:16 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Why go through all the hassle every year? Just picka company that will give you a long interest rate and just don't worry about it?
2007-02-10 20:11:09 · answer #5 · answered by mga1550 1 · 0⤊ 0⤋
no...the best way to lower your mortgage is to re-finance using an ARM...
2007-02-10 21:22:01 · answer #6 · answered by zdonz 3 · 0⤊ 0⤋