Pay sour credit card beside fixed home equity draw?
My 48 y/o sister have asked me a grill and I don't want to impart her desperate guidance. Here's her cross-examine and her stated financial info:
Should they pay cheque rotten go together on their 8.25% (prime for life) credit card (with a long and excellent credit history) and put that stability towards their home equity loan? Both enjoy glorious FICOs.
They currently own a 1st mortgage of $200K fixed at 4.25% until 5/09. They also own a fixed (locked in) rate of 7.65 on their home equity file at a 10-year occupancy next to a current symmetry of $50K ($18K avail). Their home is worth between $550-580K. They singular hold one credit card they use, but it's $12K (prime for life) currently 8.25% and she make at most minuscule double the monthly payments within an attempt to pay envelope down. They would similar to to remove the credit card debt first to know how to liberate more and not have a feeling so stretched respectively month. Plus one teen in a minute wants a motor (more outflow).
Banker will lock addt'l draw and combine both for 7.6%. Yearly income $90K. Advice?
Answers:
That Home Equity Line is almost maxed out. I wouldn't recommend transferring the credit card be a foil for to the Equity Line at this point because that just ties up monthly dosh flow. Because they'd be paying off interest and principal over that 10-year residence on the Equity vs. a couple % on credit card match of minimum monthly clearance it wouldn't be worth "saving" .6% of interest on the set off. There's also the inherent risk of running up the credit card match again which would put them in a enormously tight situation.
I mull over surrounded by this situation what they're currently doing is fine. Keep focusing on paying down that credit card debt though and keeping the be a foil for from growing instead of shrinking.
Good luck.
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Should they pay cheque rotten go together on their 8.25% (prime for life) credit card (with a long and excellent credit history) and put that stability towards their home equity loan? Both enjoy glorious FICOs.
They currently own a 1st mortgage of $200K fixed at 4.25% until 5/09. They also own a fixed (locked in) rate of 7.65 on their home equity file at a 10-year occupancy next to a current symmetry of $50K ($18K avail). Their home is worth between $550-580K. They singular hold one credit card they use, but it's $12K (prime for life) currently 8.25% and she make at most minuscule double the monthly payments within an attempt to pay envelope down. They would similar to to remove the credit card debt first to know how to liberate more and not have a feeling so stretched respectively month. Plus one teen in a minute wants a motor (more outflow).
Banker will lock addt'l draw and combine both for 7.6%. Yearly income $90K. Advice?
Answers:
That Home Equity Line is almost maxed out. I wouldn't recommend transferring the credit card be a foil for to the Equity Line at this point because that just ties up monthly dosh flow. Because they'd be paying off interest and principal over that 10-year residence on the Equity vs. a couple % on credit card match of minimum monthly clearance it wouldn't be worth "saving" .6% of interest on the set off. There's also the inherent risk of running up the credit card match again which would put them in a enormously tight situation.
I mull over surrounded by this situation what they're currently doing is fine. Keep focusing on paying down that credit card debt though and keeping the be a foil for from growing instead of shrinking.
Good luck.