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HELOC or Snowball

Wevegotthis
Established Member

HELOC or Snowball

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?

Message 1 of 13
12 REPLIES 12
creditfan
Established Contributor

Re: HELOC or Snowball

heloc is the way to go

others may have different opinions

Message 2 of 13
Wevegotthis
Established Member

Re: HELOC or Snowball

Thank you for your input

Message 3 of 13
tcbofade
Community Leader
Super Contributor

Re: HELOC or Snowball

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.

 

 

12/01/21 Fico 8: EX 746, EQ 766, TU 760.
11/03/21 Fico 9: EX 745, EQ 758, TU No idea.

Zero percent financing is where the devil lives...
Message 4 of 13
Wevegotthis
Established Member

Re: HELOC or Snowball

I didn't think about that part. Thank you

Message 5 of 13
creditfan
Established Contributor

Re: HELOC or Snowball

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

score has no long term memory

Message 6 of 13
Wevegotthis
Established Member

Re: HELOC or Snowball

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

Message 7 of 13
creditfan
Established Contributor

Re: HELOC or Snowball

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

Message 8 of 13
Wevegotthis
Established Member

Re: HELOC or Snowball

I'll check it out. Thanks!

Message 9 of 13
shmacckk
Regular Contributor

Re: HELOC or Snowball


@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.

 

 


Not all Heloc's report as revolving.

Mine reports as a mortgage.

Message 10 of 13
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