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Getting married. Home equity line of credit question
Posted on 11/4/15 at 12:23 pm
Posted on 11/4/15 at 12:23 pm
Fiance owns her house (no payments). The house is worth $260,000. We have a combined credit card, student loan debt of about $30,000. If I took out my remaining student loan debt we owe about $14,000. Would it be smart to take out a home equity line of credit for $30,000 on the house to pay off credit cards/student loans? I think the interest rate on a HELOC is %3. Any advice would be appreciated 
This post was edited on 11/4/15 at 12:24 pm
2
Posted on 11/4/15 at 12:29 pm to TechDawg2007
It really depends on the interest rates of the revolving accounts and student loans.
Personally if you can get a HELOC rate of 3% I would consolidate all your unsecured debt into the heloc. You would have 1 payment instead of multiple, and the interest rate is probably lower.
Personally if you can get a HELOC rate of 3% I would consolidate all your unsecured debt into the heloc. You would have 1 payment instead of multiple, and the interest rate is probably lower.
Posted on 11/4/15 at 12:30 pm to bubbz
I pay my credit cards off monthly. Student loan interest rate is %4 I think
Posted on 11/4/15 at 12:49 pm to TechDawg2007
quote:
Student loan interest rate is %4 I think
Depends when you took out the loan. They've been 6.2-6.8% for 4 or 5 years now.
Posted on 11/4/15 at 1:13 pm to lilsnappa
Is 3% the going rate for a HELOC? That's a good deal if so.
Posted on 11/4/15 at 1:23 pm to LSU1018
Prime (3.25) plus 1 = 4.25 is the going rate for a HELOC.
Posted on 11/4/15 at 1:31 pm to TechDawg2007
the answer is yes.. you have to look at a HELOC as a low interest credit card. the rate will be an adjustable rate. the good thing is prime hasn't moved much over the last 5 years. Make a plan to pay the HELOC off in 2-3 years. HELOC's only work if you pay them off. I see way to many customers who take out a HELOC then just pay min payments forever on the HELOC.
Posted on 11/4/15 at 2:13 pm to hawkeye007
quote:
you have to look at a HELOC as a low interest credit card. the rate will be an adjustable rate
This is essentially correct, and it is reported as revolving debt too just like a credit card. The only thing to be wary of is that the house is collateral. For this reason I always suggest keeping open an unused credit card with a high limit. Obviously you don't want to ever have to tap it, but it's an alternative to losing the house in a bad situation.
quote:
I see way to many customers who take out a HELOC then just pay min payments forever on the HELOC.
If the rate is low enough and they itemize on taxes, this isn't terrible.
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