Opinions on Best Option?

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wumpuskiller
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posted: Nov. 1, 2009 @ 12:08p

Hi All,
I searched the forum but didn't find a similar situation...hence the new thread.

I am looking for opinions on the best approach regarding either refinancing with cashout, fixed rate home equity loan, or variable/fixed HELOC based on the following current situation and objectives:

Current Situation:
- Primary mortgage was paid off about a year ago.
- Currently have a variable rate HELOC (monthly adjustable @prime [now 3.25%]). Amount of HELOC is $70K of which $66K is used.
- Credit Card debt of approx $50K - mostly due to unemployment of almost 2 years during early part of decade.
- Monthly Gross/Net income is: $11.5K Gross/ $7K Net
- Home value of $525K
- all accounts are current (no deliquencies - nobody after me)
- credit score is approx 690.

Objective:
- reduce interest expense from credit card debt
- consolidate cc debt (at least) and have a 'cash cushion' for any home projects that may arise.
- payoff all cc debt & HELOC in approx 10 years (estimated retirement age)

I am considering the following options and would like opinions on these or others:
- keep current heloc & obtain 2nd heloc (is that even possible?) bringing total home equity loan total to $140K-$150K range. I believe interest rates will rise significantly & would prefer a fixed rate even if a bit higher than current variable rates.
- get a single he loan or heloc consolidating current heloc & credit cards
- refinance the heloc with cash-out into a new primary mortgage ($140-$150K) @ fixed rate; either 15, 20, 30 year with additional payments that would fully payoff the loan in about 10 years.
- other options?

I would prefer to make whatever option is best to be a 'no cost' option and, if possible, with no escrow for taxes & insurance (current arrangement).

Thanks in advance for opinions & suggestions.

...wumpus...

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posted: Nov. 1, 2009 @ 12:08p

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motsuka
Senior Member

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posted: Nov. 1, 2009 @ 2:28p

can you get heloc limit raised then put all\most cc debt on it to raise score then maybe penfed 20year 4.99% no fee loan

lilslyk
Happy Member

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posted: Nov. 1, 2009 @ 3:07p

I won't try to give advice on which option would be best for you, but whichever you choose I think you should consider cutting monthly expenses to pay down the debt more quickly. If you are netting $7k a month you should easily be able to put $2-3k per month toward paying down your debt, especially since you have no mortgage.

ET remove my unnecessary quote of his post...must have clicked the wrong button

Message edited by: lilslyk on 2009-11-01 17:20:55 CST

nycll
Geeky member

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posted: Nov. 1, 2009 @ 3:37p

wumpuskiller said:
- Currently have a variable rate HELOC (monthly adjustable @prime [now 3.25%]). Amount of HELOC is $70K of which $66K is used.
- Credit Card debt of approx $50K - mostly due to unemployment of almost 2 years during early part of decade.
I'd keep your current HELOC since its rate is great. Can you get a 4.99% apr BT from anywhere for your $50k CC?