Keep second mortgage or move over to credit card?
I know this is probably not a good idea, but I'd approaching to understand why I shouldn't do it. I have a 30k second mortgage at 8.38%. I hold more than 30k on a credit card that has a balance verbs offer with a 5.99% and no fees. I know I'd lose the rates benefit, but wouldn't the savings benefit exceed the tax benefit? By the mode, I rarely exceed the standard deduction.
Answers:
Credit card companies will raise your rates if your credit win changes for any reason, and the type of fate you suggest could well impact your score even though you believe you’re just trading one kind of debt for another.
Furthermore, it take a huge reduction in interest rates to engineer your proposal worthwhile. If you paid this loan off over five years at 8.38%, you’re paying more or less $614/mo, at 5.99%, you’re paying 579.84/mo. That’s a savings of about $400/year. Is that really worth risking a fixed interest rate on your loan for a credit card rate that can evolution?
Do the math yourself: http://www.bankrate.com/brm/cgi-bin/apr.…
I don't estimate its a wise choice at all. A) as stated, your mortgage interest is import tax deductible (should be around $750 annually savings on your taxes) and B) credit card rates can change! Miss a pay-out, they can raise your interest rate. Late on a payment, they can tilt your interest rate.
No way in hell I would do that buy and sell!
Just my 2 cents. Source(s): common sense and reading credit card disclosure statements.
I wouldn't even consider doing that. The 5.99% interest rate on the card is probably a unfixed rate, or an introductory rate. Even if its a fixed rate for the life of the balance verbs, they can still raise the interest rate if you are late (it will vote so somewhere in the fine print).
What if your power goes out and you can't take online to make your payment on the card? What if you catch in a car twist of fate and end up spending a week in the hospital, so you aren't home to e-mail your payment? If the balance is on a 2nd mortgage, you'll foot a small late fee and verbs with life. If the symmetry is on a credit card, you'll receive no mercy and your interest rates will go through the roof.
I see your point, the math makes it look resembling a good idea, but its not sagacious to look at the math alone when making financial decisions. You must also consider the risk involved. And the risk is huge when you are talking going on for putting $30k on a credit card.
Another thing to consider, is your credit score. Having a $30k mortgage won't hurt your mark too much. But if you have a credit card maxed out with a $30,000 symmetry, it will hurt your credit score big time.
Bottom line, I wouldn't do it.
you are crazy if you even think one more second almost this as the Credit card is revolving and the second is a fixed term with a fixed rate and within case you have not hear many CC company's are raising interest rates so nation do not put high balances on them
I am a mortgage investor in TN & KY
Related Questions:
Credit Rating - any thoughts - also do bank consolidate chain of credit into a mortgage near indistinguishable dune?
I did my Equifax score and it said that i was right at the risk point. That is because I own way too many credit avenues that i can use. They are adjectives...
Answers:
Credit card companies will raise your rates if your credit win changes for any reason, and the type of fate you suggest could well impact your score even though you believe you’re just trading one kind of debt for another.
Furthermore, it take a huge reduction in interest rates to engineer your proposal worthwhile. If you paid this loan off over five years at 8.38%, you’re paying more or less $614/mo, at 5.99%, you’re paying 579.84/mo. That’s a savings of about $400/year. Is that really worth risking a fixed interest rate on your loan for a credit card rate that can evolution?
Do the math yourself: http://www.bankrate.com/brm/cgi-bin/apr.…
I don't estimate its a wise choice at all. A) as stated, your mortgage interest is import tax deductible (should be around $750 annually savings on your taxes) and B) credit card rates can change! Miss a pay-out, they can raise your interest rate. Late on a payment, they can tilt your interest rate.
No way in hell I would do that buy and sell!
Just my 2 cents. Source(s): common sense and reading credit card disclosure statements.
I wouldn't even consider doing that. The 5.99% interest rate on the card is probably a unfixed rate, or an introductory rate. Even if its a fixed rate for the life of the balance verbs, they can still raise the interest rate if you are late (it will vote so somewhere in the fine print).
What if your power goes out and you can't take online to make your payment on the card? What if you catch in a car twist of fate and end up spending a week in the hospital, so you aren't home to e-mail your payment? If the balance is on a 2nd mortgage, you'll foot a small late fee and verbs with life. If the symmetry is on a credit card, you'll receive no mercy and your interest rates will go through the roof.
I see your point, the math makes it look resembling a good idea, but its not sagacious to look at the math alone when making financial decisions. You must also consider the risk involved. And the risk is huge when you are talking going on for putting $30k on a credit card.
Another thing to consider, is your credit score. Having a $30k mortgage won't hurt your mark too much. But if you have a credit card maxed out with a $30,000 symmetry, it will hurt your credit score big time.
Bottom line, I wouldn't do it.
you are crazy if you even think one more second almost this as the Credit card is revolving and the second is a fixed term with a fixed rate and within case you have not hear many CC company's are raising interest rates so nation do not put high balances on them
I am a mortgage investor in TN & KY
Related Questions:
Credit Rating - any thoughts - also do bank consolidate chain of credit into a mortgage near indistinguishable dune?
I did my Equifax score and it said that i was right at the risk point. That is because I own way too many credit avenues that i can use. They are adjectives...