Question by Johnnie: Should I refinance my mortgage or pay off revolving debt?
Should I refinance my mortgage, which will save me $ 400 per month by combining a costly 9.99% home equity loan with my primary, or use the $ 10000 I need to close to pay off my credit card debt (which would pay off all my credit cards)?
I’ve already been approved for the loan…I have good credit so that $ 10,000 in debt doesn’t kill my credit score which is still over 700.
The home equity loan is $ 35000 at 9.99%, my credit cards are not much higher than this so I am most anxious to get rid of this bad loan…Am I thinking about this the correct way?
Answer by Judy
With that much credit card debt, you might not qualify for a low interest loan. You might still see yourself paying 8+% interest.
Which after paying all the closing costs might not be worth it.
Catch 22 isn’t it?
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