Refinance or heloc?

Hi.I have a home valued at about 235k(bought in 8/07).Balance on current mortgage is 203k.I used a VA home loan with fixed rate of 6.6%.i want to consolidate or pay off hi-interest cc bills totaling about 14k-accumulated from grad school(now finished); and also make some minor home improvements.fico score is fair.staying in the home for at least 7 yrs.should i do a cash out refi? or get a heloc? or just refi?

Refinance or heloc?

Well you're currently paying PMI, correct? (As your loan amount is more than 80% of the home value, I'm assuming this).

If you Refi and pull more money out, you'll be paying a great deal of money towards the PMI, money you'll never see returned to you...

What do I mean by all this?

A 30 yr fixed (again I'm assuming) is a closed amoratization loan. Your monthly payments on this home are first going to the monthly Interest accrued; then the small portion remaining goes towards your balance.

If I had to guess, I'd say your monthly loan payments are 1300-1400 a month with an extra 175-200 a month paying your mortgage insurance. Am I in the ball park?

The first month you paid this $1600 or so and had about $250 go towards your principal. The next month you had roughly $251 go towards principal and so on. So in the 6 months since, you've paid down maybe $1500 of you loan balance. You paid 9k to the bank to pay off 1500...

Until your loan balance hits 188k you'll have to keep paying your mortgage Insurance (PMI).

So, the current 15k that you'll have to pay off will take most of the 7 years you plan to live in this house.

If you refi and pull out another 14k you might get a lower interest rate (if you can even get a bank to loan you money up to the 93% LtV ratio), BUT your PMI will be recalculated higher, your monthly payment will be recalculated higher, AND your ammoritazation schedule will restart, meaning less will be going to your principal and a longer time you'll be paying your PMI.

Not something I'd want happen to me...

IF, IF, IF you HAVE to do something about these credit cards and can't pay them all off now, get yourself a HELOC and pay it down as fast as possible.

Then you have afew options like paying a chunk of your principal down via your HELOC to get out from under the PMI faster, but that's a more advanced topic for ater conversation.

My BEST advice...

Just pay the cards off as much as you can. Make the minimum payment on three out of the four and pay the highest one down as fast as possible.

Refinance or heloc?

Mortgage rates are near 5.6%. Sound like a refinance is the way to go.

Refinance or heloc?

Don't turn unsecured credit card debt into debt secured by your house. Just work on paying the credit cards off and then doing home improvements.

Refinance or heloc?

If something happens, and you miss a payment on your credit cards, they'll scream and yell.

If you miss a payment on your new heloc, they'll take your house.

Is it really worth saving a few points?

Or stretching out your credit card bills out for 30 years?

Also, if you refi, you'll owe $217K on a $235K house, leaving you with only 8% equity. You won't get a low interest rate with that low an equity, plus you'll be paying PMI.

My advice: Don't refi, don't get a heloc, just pay down your credit cards with as much as you can save from your monthly income.