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HELOC or Snowball

Kasuito39
Regular Contributor

Re: HELOC or Snowball

Here is my 2 cents. 

1. Shop for the best CUs preferably that offer between 90% to 100% CLTV on Heloc or HEL and use as your checking account to pay bills from. 

2. Shop for the best CUs preferably that offer between 90% to 100% CLTV on Personal Line of Credit (PLOC) and use as your checking account to pay bills from. 

3. If you have a business, shop for the best CUs preferably that offer between 90% to 100% CLTV with 0% or low Business Line of Credit (BLOC) and transfer your balances. This will free up your personal DTI ratio.

4. All the above will require low DTI to acquire so maximize your soft pull CLI on all your cards. Cash Flow is key and the more the better and faster. 

5. Once any of the above products is acquired, you can leverage by fast tracking repayment of CC first since they are revolving. 

6. This requires alot of discipline to achieve so remain extremely conservative on CC use since your focus is repayment. 

7. Next move to Personal Loan pay down as well using method above. 

8. Alternatively, you can skip all the above strategies and maximize repayment with all the excess cash flow you have once all your debts are paid using the debt snowball and Avalanche methods. 

9. Either way lots of patience required, so keep the focus and celebrate any small wins by not spending. 

10. The hardest part is getting started. So take Action! 

11. Bonus - Find ways to Increase your income/cash flow and dedicate to debt paydown. 

12. Wish you the best of luck! 

Message 11 of 13
SouthJamaica
Super Contributor

Re: HELOC or Snowball


@Wevegotthis wrote:

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?


In my opinion, no. I don't think it's a good idea to take personal debts and put them against your home. 

 

It's your home.

 

Just concentrate on

 

(a) paying your credit card balances down (yes, snowball is the best IMHO)

 

(b) making your loan payments

 

Don't worry about paying the loans off at this point.

 

Leave your home alone.


Total revolving limits 698000 (605000 reporting) FICO 8: EQ 721 TU 742 EX 715

Message 12 of 13
Wevegotthis
Established Member

Re: HELOC or Snowball

Thank you for your advice. 

Message 13 of 13
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