Should I tap into home equity?

iVillage Member
Registered: 09-08-2003
Should I tap into home equity?
3
Thu, 11-18-2004 - 5:25pm

I have a NJ co-op (not a condo or home) which means that I cannot get a home equity loan. Instead, to tap my equity, I need to refinance in all.

My dilemma is that I currently owe $10K in high interest credit cards and seriously am considering refinancing my home and taking out an extra 10K. The problem is that closing costs in and of itself, would be about $5,000. I feel it's stupid to $5,000 just to get $10,000 out of it. But it's so tempting with the lower interest and lower payment.

I'm not that mathematical a person, so I don't know what would be best?

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Thu, 11-18-2004 - 8:32pm
That would be the equivalent of paying 50% interest up front for the money, and then paying the monthly interest on the new home loan.

All my best,
Danni

iVillage Member
Registered: 09-08-2003
Fri, 11-19-2004 - 1:12pm

Thank you! You make such a valid point, I can't believe I never looked at it that way.

I'll stick to my cards the way they are, and try to pay them down, or get a lower rate elsewhere- good point!

Thanks!

Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Fri, 11-19-2004 - 5:36pm
You're welcome.

All my best,
Danni