@Azza wrote:
@Citylights18 wrote:
-Big no fee BT cards allow you to consolidate debt, even from a mortgage. With an offer of 0% APR on a 50,000 dollar credit card you could theoretically make a lump sum BT payment from your mortgage and if you could pay that off in one year you could save yourself a lot of interest on the mortgage.
What! That's a fun idea, but isn't just paying more towards your principal with additional payments the better way to go? My mortgage allows me to pay more than my monthly payment each month and any additional over the top goes straight to the principal, robbing the loan a chance to sink more interest into me.
Do both methods achieve the same thing or are they affecting the loan differently?
Moving real estate debt to a credit card is a bad idea. RE debt tends to be very large, the monthly payments stretch out over decades, so the payments are low. Interest rates today are microscopic for mortgages, so refinancing is a good move.
Paying more on the monthly mortgage payment is the way to go. If you can pay off $50k of mortgage debt in a year, do it on the mortgage account. The way things have been going, no telling if you can keep up that rate of payments on a CC. On a CC, no choice but to pay it fast because the 15%-25% APR is waiting for you with open jaws at the end of the year. Paying the existing mortgage faster moves you out on the amortization schedule. If you need to stop, the regular amortization rate is the fallback.
