To refinance or not
Terry, I have a 5.5% FHA mortgage with 13 years , 132k left and $25k in CC debt. Should I;
1. Refi for a better rate pushing the loan back to 30 yrs.
2. Cash out refi, pay off CCs, and back to 30yrs.
3. Stay as is.
Thanks,
Terry Says
Well, that all depends on WHETHER YOU QUALIFY to refi now. You need to be employed, and they are now looking more closely at your employment current and future prospects when it comes to a refi. And your credit score counts, as well.
I don’t know how old you are, or what size monthly pyament you can afford. I traditionally would have suggested you refi to a 15 year mortgage at a lower rate. But that wouldn’t likely let you take out a lot of cash, or bring much change to your monthly mortgage payment.
So maybe a 30 years is best — IF you can take out cash and use it for sure to pay down credit card debt. The only way to know is to start the process at a place like GuaranteedRate.com or QuickenLoans.com and see what the numbers look like. (Just a reminder that the interest on the portion of your mortgage that is used to pay down debt is not deductible.
