Financial Advice

[wildcatgirl]

If you are at all financial smart please listen to my story and give me some advice!

About 4 yrs ago I made a decision to get out of credit card debt. My solution was to take out a home equity line of credit for around 23,000. the rates were great and I thought this is what my husband and I needed to do because we were making credit card payments of around 600.00 a month and we could cut that in half! At the time "variable rate" didnt mean that much to me be/c they were so low. Boy have times changed.

I still owe 18,000 on this line of credit and the interest rates are going up up and up. The finance charges are very high and no one seems to be offering fixed rates that are very good right now. My house mortgage rate is very low. We refinanced years ago at around 4.5%. I thought about consoliating both loans into a new mortgage but I think with my low rate on my main mortgage that would be stupid?
What should I do about this line of credit? Any ideas? 18000 is a lot of money owed and w/ the f.c. rising so fast I am getting worried.

 

[Gloria]

some ideas

Look into other financial institutions home equity accounts. Many open for free or little cost to you. Some banks offer a fixed rate if you are afraid of the variable rates

DO NOT put it in with your 1st mortgage. Your long term rate will never be 4.5%. It will be much higher.

Plus, with a 2nd mtg, you can put the interest on your taxes. With any other type of loan/credit card offer you can't.

 

[Dawn]

Home equity line

First of all, I think you should pat yourself on the back. In 4 years you have paid off $5000 of your debt, and that's a great achievement. I think that the prevailing rate for 1st mortgages right now is over 4.5%, so as the other poster said, you probably don't want to refi and roll it over into your 1st mortgage balance. There is a lot of competition out there for home equity lines. If you have good credit, I would think that you could find a fixed rate HEL that beats your rate, or a lower variable rate. Sometimes, even your current lender will lower the rate when you tell them you are shopping around the competition. Whether it's your first mortgage or your HEL, the interest you pay is tax deductible, which is still better than any other loan or credit card debt.

Good luck, and keep chipping away at it!

 

[anonymouse]

Dave Ramsey's TOtal Money Makeover

Go to the library and get Total Money Makeover by Dave Ramsey. Read the chapter called the Debt Snowball.

 

[SC]

Congratulations!

Congratulations on paying off so much of your debt.

If I were you, I wouldn't consolidate loans because many times you'll end up paying more in the long run. I would look into switching the debt to a fixed interest loan. Check with your bank, and be wary of anything that sounds way too good to be true.