Q: DEAR BOB: ... I have owned my home for six years and have a 30-year, fixed-rate mortgage at 5.375 percent ... My FICO score is 779. I recently met with a financial adviser, who recommended that I refinance with a 20-year, fixed-rate, interest-only mortgage at 6.75 percent ...
A: DEAR PHYLLIS: ... If you want to pay off your credit card debt, get a home-equity credit line. With your superb FICO score, your bank should eagerly approve such a credit line at the prime rate or lower.
This is one of those rare times when a financial guru seems to actually give good, solid advice.
It is also a lesson that the predatory lending sharks are STILL swimming. Do NOT let the "good news" about the fall of subprimes mislead you into believing the predators are gone with subprimes. They are alive and I suspect "well fed".
While Bob Bruss' advice is good, I think Phyllis would be better served if she checked into a CU like CCCU, NASA, Penfed or Justice. Penfed offers 5.99 on BT for the life of the BT, and someone with a 779 FICO should have no trouble getting $25K to $50K CL. There are obviously 0% come on offers, but I've seen some folks get 4.99 out of AMEX, life of the BT. The Discover Card Motiva is offering 3.9 on BTs through 2010.
Message Edited by Noah_Bodie on 08-25-200701:52 AM