Another “Paying Off Mortgage” Question
Question: My bank is offering home equity loans at 6.9% with ten-year amortization. I can see how that might make it attractive to pay off other, higher-interest loans; seems like it might be a good idea indeed, for some.
Answer: For SOME is the key here. I am a CPA, and will tell you that more people than you think will take out a HE loan to pay off their cards so they can just Maxim out again. Unless I know the person very well, I recommend consolidating as much as you can onto the lowest interest rate visa you can qualify for. As the cards are paid off, cut up (and cancel) all but two VISA type cards…one that you pay off each month, and one for emergencies.
This may cost extra in interest, but is safer for many people.
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Filed under: Home Equity Loan
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