Im paying 18% interest on my credit card ($3000) would it be better to put it on my home loan where Im only paying 8% interest?
2007-11-28 05:18:18 · 6 answers · asked by Ronnix1960 2 in Business & Finance ➔ Credit
Yes ,it is.
2007-11-28 05:20:53 · answer #1 · answered by WC 7 · 0⤊ 1⤋
This really depends.
How much value do you have in your home? If you don't owe less than 80% of the CURRENT market value, you won't be able to get a mortgage/equity line.
Adding a second mortgage/equity line is risky, if for some reason (lose your job, get sick, get divorced) you could end up losing the house over a $3000 debt. Not good.
Technically money taken from equity and used for NON home improvements is not tax deductible, so you should break the interest paid on that portion out of the computation when you claim your home interest. What a pain.
How good of a rate do you have on your primary mortgage right now? You may not be able to get another mortgage for a better rate.
And finally, the appraisal fees, application fees, inspection (if bank asks for it) and any other of number fees that mortgage bankers add would probably be quite costly. I have seen fees end up being between $1000 and $2500. So you draw out $3000, but end up adding $5000 to your mortgage. You would be better off paying the 18%
For $3000 I would just go take a part time job for a few months and put every dime I bring home towards paying the card off. It could easily be done in less than 6 months with a part time job.
Good luck to you.
2007-11-28 05:27:17 · answer #2 · answered by Gem 7 · 0⤊ 0⤋
no. Knuckle down and pay it off. take a second job if you need to until the debt is payed.
You put the money on your home and for some reason you cant make the payments. The bank will take your home. If for some reason you can't pay the credit cards they will not take your home.
Go to daveramsey.com and listen to his radio show. He has lots of great advice on money and debt. It doesnt cost a dime to listen to the radio.
Debt free is the way to be!
2007-11-28 05:26:56 · answer #3 · answered by heybulldog 5 · 1⤊ 0⤋
It depends. If adding it to your home loan will cause you to have to refinance, then the closing costs will be more than you would save on interest. It also isn't a good idea if it extends the term of your loan. If you can add it without doing those two things - then it will save you money.
2007-11-28 05:22:22 · answer #4 · answered by arkiemom 6 · 0⤊ 0⤋
Only if you cut up the credit card so you cannot use it again, otherwise you will just put yourself even further in debt
2007-11-28 11:14:24 · answer #5 · answered by Pengy 7 · 0⤊ 0⤋
Most definitely!
2007-11-28 05:21:12 · answer #6 · answered by clbowman06 4 · 0⤊ 1⤋