Mortage AND home equity loan at once
Question: I have a general question about mortgages. Is it possible to get a mortage for x$ above the amount you need to borrow to pay off credit cards completely ?? We have super credit and have each been at our jobs for 3+ years.
Answer: Yes, you can. You can either get a larger mortgage, or combine a mortgage and a home equity loan. In general, you cannot get a mortgage for more than 100% of the value of the property, and the interest rate usually goes up if you have less than 20% equity (plus you pay mortgage insurance). With an equity loan, you can usually go up to 125% of the value of the property.
The one key thing to be aware of is that it is a sub-optimal move to convert a short term debt like credit cards into a long term debt. That $10 pizza you charged becomes $25 by the time you pay off the cards, but it can be $75 by the time you pay off the mortgage. If you really do have good credit (I have no reason to doubt that), then you should be getting a lot of 0%, 1.9%, and 4.9% credit offers. I’d suggest using that to carry your credit card debt, and do what you can to pay it off ASAP.
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Filed under: Home Equity Loan
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