My wife and I owe over $150,000 in student debt with interest rates around 9-11% on each loan. Is it better to just refinance our house and pay it all off, for a lower monthly payment and interest rate?
2007-03-27 08:22:22 · 4 answers · asked by HoustonJustin 1 in Business & Finance ➔ Personal Finance
Yeah, if your sure that you can continue making the payments. Otherwise, you will lose your house. If you quit paying on the student loans, your credit will be greatly affected, but you will still keep your house.
If the payments are not anything to worry about, then I would refinance with a lower interest rate definitely. Even a percentage or two lower is alot of money saved in the long run.
2007-03-27 08:28:00 · answer #1 · answered by kmf77 3 · 0⤊ 0⤋
It doesn't matter if you're talking about student loans, mortgages, credit card debt, or car loans. The "best" debt is debt with relatively low interest rates--you want the debt with the lowest interest rates you can get.
Say you're shopping for a car, for example. If you have a credit card with a fixed 5% rate, and you qualify for an auto loan at 8%, you should put your car on your credit card as crazy as that sounds. The goal is always to minimize your interest rate so you can pay the debt off faster.
If you are paying 9-11% on student loan debt and you can qualify for a 6-7% mortgage, then you should definitly re-fi your home and pay off the student debt.
2007-03-27 08:32:34 · answer #2 · answered by lizzgeorge 4 · 1⤊ 0⤋
House is better because you get a tax break with the mortgage.
2007-03-27 09:01:09 · answer #3 · answered by puppy2fast 1 · 0⤊ 1⤋
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2007-03-28 00:58:40 · answer #4 · answered by jack 2 · 0⤊ 0⤋