thank you for your answer.. I will pay down my home equity $30,000. it will take about a year.I have paid off about $40,000 in credit card so far .I have a 7 year ARM $230,000 mortgage. I am 2 years into it .3.50% I am Not sure if we are staying in the house after 7 years ..we originally were leaving but my wife has been unable to work due to a disability so do Icontinue on the plan of paying my home equity and refinance on the 7-year arm in a couple of years or do I refinance now
Terry Says: Definitely refinance the entire deal — home equity loan and current mortgage — into a 30 year fixed rate mortgage. That way you won’t be exposed to fluctuations in interest rates. You can always sell the home if you decide to move. And if you decide to stay, you can always prepay a bit extra every month. And you might check the monthly payment and rate on a 15 year fixed rate loan, because that would solve the problem of paying extra and build equity more quickly.