HELOC or Snowball

[Anonymous]

We currently owe $69k in personal loans (payments total $1751) and $25k in credit card debt (minimum payments total $700). We refinanced in July without taking cash out. Our net monthly income is $8900, our mortgage is $2466, 2 car payments that total $800, car insurance is $370, cell phone $205. We have $190k in equity. Would it be smart to take out a HELOC to pay these loans and credits cards off?

[creditfan]

heloc is the way to go

others may have different opinions

[Anonymous]

Thank you for your input

[tcbofade]

Just looking at rough numbers, you might want to research a home equity LOAN vs a home equity Line of Credit.

A home equity loan is less flexible, but reports as a mortgage... a home equity line of credit reports as a revolving line and will affect your Fico scores just like a credit card would.... if you max it out, you'll face a score penalty.

[Anonymous]

I didn't think about that part. Thank you

[creditfan]

you have to weight to see which is more important to you

score has no long term memory

[Anonymous]

I was thinking I would do the HELOC, payoff either the credit cards or the loans, make double or triple payments as they won't be as high as the current payments keep the line of credit open and use it in the future, if needed. I just worry about the payments fluctuating with rate increases

[creditfan]

if you go to youtube and search for velocity banking. Once you understand the concept , rate is no longer your concern

[Anonymous]

I'll check it out. Thanks!

[shmacckk]

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@tcbofade wrote:

Just looking at rough numbers, you might want to research a home equity LOAN vs a home equity Line of Credit.

A home equity loan is less flexible, but reports as a mortgage... a home equity line of credit reports as a revolving line and will affect your Fico scores just like a credit card would.... if you max it out, you'll face a score penalty.

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Not all Heloc's report as revolving.

Mine reports as a mortgage.