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[quote=mortimer;23918149]I'd like to point out that paying off cc debt at, maybe, 18-21% ( non-deductible )
with a HELOC is a good idea. Now the rate is under 4% and deductible.
$60k in cc debt? What is that debt now? ( in addition to the $230k in mortgage debt ).
Many people, during the housing boom, saw those $-0- balances and said "Let's go SHOPPING!!" That would be bad.
Luckily the debt is still low. For years we didn't even have another CC (we used our debit card instead) but 2 years ago my husband needed to get one for work travel expenses. There tends to be about 3-5k as a balance until he gets the expense check.
I'd like to point out that paying off cc debt at, maybe, 18-21% ( non-deductible )
with a HELOC is a good idea. Now the rate is under 4% and deductible.
But the debt was just shifted around rather than paid off. It's true that transferring it to a lower interest rate is helpful, but you also need to factor in that now the money is against your home, not just a credit card. If the heloc is still at $60k, as mentioned in the original post, the real problem hasn't been addressed which is the accumulation of debt. That's the problem with moving debt around to a different interest rate, often no real dent is made in the actual debt. It gives a false sense of progress. And now it's keeping the OP from accomplishing the goal of refinancing.
But the debt was just shifted around rather than paid off. It's true that transferring it to a lower interest rate is helpful, but you also need to factor in that now the money is against your home, not just a credit card. If the heloc is still at $60k, as mentioned in the original post, the real problem hasn't been addressed which is the accumulation of debt. That's the problem with moving debt around to a different interest rate, often no real dent is made in the actual debt. It gives a false sense of progress. And now it's keeping the OP from accomplishing the goal of refinancing.
I'm sorry, I wasn't clear. The heloc has stayed at @ 60k because it's interest only and has a variable interest rate of 4.75 . We haven't ever withdrawn from it. We add $100 to the principal every month.
I'm sorry, I wasn't clear. The heloc has stayed at @ 60k because it's interest only and has a variable interest rate of 4.75 . We haven't ever withdrawn from it. We add $100 to the principal every month.
Shouldn't it be less than $60K now then, since you are making reduction payments?
I normally would agree, but the first can probably be refi'd to a lower rate than the heloc.
Likewise, but the OP will have to use HARP because of the HELOC.
With the HELOC, the OP isn't going below 5% ( others without a HELOC
appear to get much better. Right now, a civilized HELOC is < 4%, but
if the OP has one of those nasty 9% HELOCs or something ...
My HELOC will certainly go from the current 3.7% or so to over 8% some day.
My monthly extra principle will move to IT at the time the HELOC goes over 5.125%.
Likewise, but the OP will have to use HARP because of the HELOC.
With the HELOC, the OP isn't going below 5% ( others without a HELOC
appear to get much better. Right now, a civilized HELOC is < 4%, but
if the OP has one of those nasty 9% HELOCs or something ...
My HELOC will certainly go from the current 3.7% or so to over 8% some day.
My monthly extra principle will move to IT at the time the HELOC goes over 5.125%.
Why do you say 5%? That sounds way too high to me. I was thinking 4%.
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