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We're burdened with just over $30,000 in credit card debt from recent renovations. Trying to decide how to proceed. We have about $18,000 in stocks which we could sell and pay directly down on the debt. That would leave us with little or no safety cushion. Or, we could refinance and then open a home equity line. Or, both of the above in some combination. Current mortgage is $156,000. House just appraised for $215,000. Any suggestions?
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No. of Recommendations: 0
We're burdened with just over $30,000 in credit card debt from recent renovations. Trying to decide how to proceed. We have about $18,000 in stocks which we could sell and pay directly down on the debt. That would leave us with little or no safety cushion. Or, we could refinance and then open a home equity line. Or, both of the above in some combination. Current mortgage is $156,000. House just appraised for $215,000. Any suggestions?

radios2,

I would recommend holding on to the stocks (assuming they have good fundamentals and you would choose to keep them if did not have the debt) and strongly consider the home equity line. The rates will often be lower, the interest is generally tax-deductible, and you don't create a taxable event by selling your shares of stock.

My two cents worth.

messerb
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We're burdened with just over $30,000 in credit card debt from recent renovations. Trying to decide how to proceed. We have about $18,000 in stocks which we could sell and pay directly down on the debt. That would leave us with little or no safety cushion. Or, we could refinance and then open a home equity line.

While I don't really like home equity loans, in your case I would go that route before selling all your stocks. Since the money was put in the house, borrowing against it wouldn't be so bad in my opinion. Especially when you consider the differences in interest rates.

George
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While I don't really like home equity loans, in your case I would go that route before selling all your stocks. Since the money was put in the house, borrowing against it wouldn't be so bad in my opinion. Especially when you consider the differences in interest rates.

Feeling the same way about equity loans, ie. paying off unsecured loans with a secured loan, I have to agree with George on this one. I think it could be your best move, especially with the idea that the loan would be tax deductible as it's being taken for home improvements.

Tony
...but I still am...

Off2Aruba
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