Hello,
My gf and I have lived in our 2004 built townhome now and we seem to have maybe 60k or so in equity…We owe about 10k in CC debt and was wondering would it be wise for me to pay them off first and then refi, or refi and cash out 10k to pay the debt?
She had a 720 fico until the CC balance lowered it to about a 640 fico and we are now at a 6.44% 5/1 ARM Stated/Stated and I want to lower it.
Either that, or we want to buy another house either under her name 100% with maybe a cash at close deal, or maybe use my name for investments but I have a 620 middle with a lot of collections that I am currently taking care of.
Any advice is greatly appreciated.
What state are you in?
By refinancing you can take advantage of a tax deduction, payoff your high interest rate credit cards therefore improving your credit rating+ a competitive interest rate.
Great, so do you want to pay off your credit cards and increase your credit rating?
yes, but i use to be a mortgage broker so i know how things kind of work. I know that if I pay off the cards first, then do a rapid rescore the scores will be high, THEN i will refinance for a lower rate.
then you know what to do.
lol, ok thank you. I was just trying to see other input. Thanks
But that begs the question. If you have 10k in credit card debt how long will it take to you pay that off? How much money will it ultimately cost you in interest. Now take that dollar amount and see how long it would take to you hit ‘break even’ in the difference between your interest payments on a cashout refi now at X rate and with a cashout with higher ficos at ‘Y’ rate.
With all of the numbers I’d be very very surprised if paying off the cards before refinancing wasn’t a worse decision by a huge margin.