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).
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
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?
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