No. of Recommendations: 0
First post hope it works.

It did. :-)

I recently had my home appraised and it seems that after only 1 1/2 years the value has increased some $45,000 from $63,000 to $105,000. Of course there was some elbow grease involved. I am in the process of refinancing and was wondering if it would be better to cash out at 7.125 and pay off about $14,000 worth of debts (interest on that is no lower than 14%) or to do a home equity loan at 7.99 and have it payed off in under five years. Any suggestions?

I would do the refinance (hopefully you are getting a pretty significant rate reduction if you originally financed 1 1/2 years ago!).

However, as far as your suggestions on paying off the credit cards, I would do neither of the choices you suggest. In both cases you are essentially making your home collateral for the "stuff" on the credit cards. More importantly, you may very well feel that the freed up cards would be "found money" available to spend. Instead, I would take the amount you save monthly on your mortgage after refinancing and apply it toward your credit card balances. Look for offers which allow you low interest rates for balance transfers to minimize the amount of interest you pay on the cards.

Hope this helps.
Print the post  

Announcements

UGC Disclosure Notice Regarding Credit Card Posts
Community board discussions about credit cards are not provided or commissioned by banks who may have advertising relationships with The Motley Fool. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.
TMF Credit Center
The Motley Fool Credit Center arms you with real tools and simple messages, that will help you in every credit situation.
What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Community Home
Speak Your Mind, Start Your Blog, Rate Your Stocks

Community Team Fools - who are those TMF's?
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.
Advertisement