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Im new to Fooldom, and asked this question at Fools and their money Board, and did not receive a response. was it the wrong Board?
Anyway, Iwant to refinance my mortgage, and at 1st,before I found TMF, I was going to get a 15 year loan to replace a 8.75% note, with 25 years remaining.
I have no plans to sell with in 5 years.
After reading TMF Investment guide, 13 steps, and
You have more than you think, I want to invest in stocks more than ever.My question is what to do with my CC, and car dept. If I get a 30 year mortgage and add the dept (11k cc, 9k car) into the loan, I would "free up" about $700/m, with loan of 142k and payments of approx $1200. I could prepay $200/m and have $500 remaining to invest, IS THIS FOOLISH ?

Thanks for any help

hoping to be a Foolplayer
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Foolplayer Wrote:
<Im new to Fooldom, and asked this question at Fools and their money Board, and did not receive a
response. was it the wrong Board?>

No, it was the right board. I couldn't figure what exactly you were asking. After a quick read, I thought you were telling us what you were going to do. For other Fools, it might have been lost in the noise.

<My question is what to do
with my CC, and car dept. If I get a 30 year mortgage and add the dept (11k cc, 9k car) into the
loan, I would "free up" about $700/m, with loan of 142k and payments of approx $1200. I could
prepay $200/m and have $500 remaining to invest, IS THIS FOOLISH ?>

My take on this is that it is going to be worth your while to refinance. But the question still remains: should you add the CC and car debt? If you decide to do that, it solves the problem in the short term. The big question in my mind is: In three years are you going to have a larger mortgage, another 11K in CC debt, and have to replace your current car? My point is, you may have to address why you have 11K in CC debt before considering investing.

Mike
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<<You have more than you think, I want to invest in stocks more than ever.My question is what to do with my CC, and car dept. If I get a 30 year mortgage and add the dept (11k cc, 9k car) into the loan, I would "free up" about $700/m, with loan of 142k and payments of approx $1200. I could prepay $200/m and have $500 remaining to invest, IS THIS FOOLISH ?>>

OOOH...it depends. Basicly, you are taking refinancing and making it a home equity loan. It does lower your interest, and make it tax deductible. However, you now owe more on your home, which might present a problem when sales time comes. Also, watch those CC's after paying them down and don't run them up again.

In general, I don't like home equity loans because of what it does to the equity left in the house when you want to sell. However, there is no set rule, and if you have enough equity in the house it is better than paying the high interest on the credit cards. In that case, it's important to change habits in spending to keep from running those cards up again.
George
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Foolplayer:

GULP! 11K in CC debt? I agree with Mike on this one. You must first examine why you have 11K in CC debt and then make sure it never happens again.

If you are determined not to accrue that kind of debt again, it may be worth rolling up into mortgage for reasons Mike & George pointed out. Especially if the CC Debt is at a high rate.

On the car, you need to look at the interest rate on the car loan and how long you have left to pay on it. When I bought my home, it did not make sense to roll the auto loan (7%) into the home loan (8.375%). Don't forget that by rolling a car loan into your mortgage, it like having a 30 year (tax deductable) car loan. 30 YEARS.

You said: >>If I get a 30 year mortgage and add the dept (11k cc, 9k car) into the
loan, I would "free up" about $700/m, with loan of 142k and payments of
approx $1200. I could prepay $200/m and have $500 remaining to invest,
IS THIS FOOLISH ?<<

Are you sure you want to prepay the mortgage? Once again, a lot will have to due with what interest rate you lock in and how worried you are aboult building equity. Example: If you get a 30 year at 7.5% and choose to prepay $200/month you are basically guarantee yourself a 7.5% return on your $200. But how much would your return be if you invested it in the market??

Good luck! AJE
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