Should I Refinance My Home

Question: Should i refinance my home and pay off credit card debt?

(Posted by: Nathan Teater on 2008-03-31 10:28:44)

My wife and I have an ARM mortgage that will jump to 8.5 % this summer. The loan is only for 92, 000. We have 1 credit card that is about $13, 000. We don't plan on staying in our place for more than 18 months, but want so desperately to pay off our credit card. Would it be wise to refinance now to a fixed loan at a lower interest rate than 8.5 % and pay off the credit card even though we will be moving in a 12- 18 months? Thanks to all that have answered so far. The house is worth $135, 000. I don't want to refinance for that amount because I don't want to have problems when I sell it next year. I was thinking about refinancing for 120- 125, 000 Thanks

Posted by: Teresa on 2008-03-31, 10:47:24

Get the fixed loan immediately. ARM loans are so dangerous, ecspecially since you have other debt. Unless you plan on moving before the interest goes up, u need to refinance. Then, with a more stable mortgage payment, you acn work down your credit card

Posted by: kelbean on 2008-03-31, 10:52:39

It depends on how much your house is worth and what your credit is like. You can talk to a reputable mortgage broker (they shouldn't charge you anything to tell you what they can do for you)

Posted by: Doctor Deth on 2008-03-31, 10:54:35

The loan is for 92k, but how much is the house worth? - unless it worth at least 110k, you won't be able to refinance for enough to pay off the credit cards in full

Posted by: Real Estate Guy on 2008-03-31, 12:36:55

There are 2 questions. Should I refin and should I use the equity to pay off debt. Should I refin? Usually it's a good idea, especially if you can do a fixed rate with NO CLOSING COSTS. Should you use equity to pay off debt. NO. What you need to do is learn to save. You have 13k debt because you spend more then you earn. You should be able to pay your bills in full each month AND save 10% of your income. Pay off the debt by cutting back or getting a part time job. Pay yourself first!! QUESTION: why do you want to refin for 125k when you only owe 92 and 13 = 105. What are you going to do with the other 20k. Plus, giving yourself only 10k equity when you sell is not good. If (and only if) the house is worth 135k assume that it will cost you about 10% (closing, realtor and concessions) to sell. This is $13,500. And you would only have $10,000 equity. Now you are upside down.

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Posted by: Hazel S on 2008-04-02, 13:28:08

You should definately refinance and get a fixed rate loan and pay off your debt. It's really important to pay off credit card debt if your interest rates are higher than your new fixed rates. But if you're cards are at a 0% rate then why bother. Check out this site for help: credit-card-loans-debt.com/ credit/

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