Is it better to use line of credit for house to pay credit card debt (house is almost paid for)?

We want to add a new roof, pay off credit card debt and car loan. Should we continue to make payments to debtors or combine all and pay with line of credit for house. House will be paid for this year.

( Age 66 and retired. Asked by Anonymous 34 months ago Similar questions: line credit house pay card debt paid Business > Financial Planning.

Similar questions: line credit house pay card debt paid.

I would not use a LOC against your home, which is almost paid off, and is your biggest asset. That's just jeopardizing it for expediency. Perhaps getting a loan against the home, only to get the roof taken care of, makes sense, but not the other stuff.

For the car, you’re probably upside down, and owe more than it is worth, and most people who use a heloc to pay off credit card debt do not due anything else to reign in the spending such as creating a budget and staying on it, so soon, they have the heloc to pay for as well as new credit card debt. My recommendation - pay off the home and do not draw against it so you do not lose that asset. Create a budget and make some sacrifices to pay off your other debt - the highest interest stuff first.

Save up money so you can pay for the new roof with cash, especially since the roof is a want rather than a need. Most helocs are not fixed interest rate, and will rise if and when the economy improves, and the interest rate you get now will increase - it may double or triple, and then how will you make the payments? Keep in mind that as a retired person, whether you’re living off retirement, 401(k) or SS, your income is fixed and limited, and your expenses will continue to rise the older you get as a result of your aging body breaking down.

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That depends on your situation. If you have the income to pay the credit cards and builders and car loans, then you should have the income to pay the line of credit. Would this be a HELOC (home equity line of credit).

The interest on a HELOC is usually much less than credit cards, and it is usually tax deductible. That would be the advantage of using a HELOC to consolidate your debts. The disadvantage would be putting your home at risk.

If your income dries up, you can stop paying credit cards and car loans, declare bankruptcy, and keep the house. If you stop paying on a HELOC, you could lose the house through foreclosure. Your decision should be based on the amount of interest and tax savings, how secure your income stream is, and how much risk you are willing to accept.

You don't mention how much savings you have. You probably do not want to tap into that for the new roof, credit cards, and car loans, but it can act as a safety net. In the worst case scenario, you could pay off the HELOC with the savings.

Painful, but better than losing the house. Depending on the wording in your HELOC, they can be interest only instruments, where your minimum payment is only the interest on the loan which can run indefinitely. You should consider getting some professional advice, other than from the HELOC officer at your bank.It might be worth the consultation fee to get an expert's opinion after you have presented them with your complete financial picture.

Congrats on being so close to paying off the house! .

Roll it into your house I would roll it into the house's mortgage. You cannot write off the intrest from debtors, but you can write off the house ;) .

1 I get scared just reading your question. Be careful.

I get scared just reading your question. Be careful.

2 IF you are paying your debt okay the way you are paying it, I would say to continue to do it the way you are, but at the same time, try not to make anymore debt. In other words, work on paying each credit card off and once one is paid, the money you paid into that one...pay additionally on another until they are paid in full. If you get a line of credit for a roof, I think that is fine as long as you do not use it for other stuff that you do not need.Do not run up a large line of credit on unneeded things because that is a real slippery slope...

IF you are paying your debt okay the way you are paying it, I would say to continue to do it the way you are, but at the same time, try not to make anymore debt. In other words, work on paying each credit card off and once one is paid, the money you paid into that one...pay additionally on another until they are paid in full. If you get a line of credit for a roof, I think that is fine as long as you do not use it for other stuff that you do not need.Do not run up a large line of credit on unneeded things because that is a real slippery slope...

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I HAVE 5 CREDIT CARD DEBT LIENS,50,000). MY HOUSE IS WORTH ABOUT THE SAME WITH 0 MORTGAGE. SHOULD I FILE BANCRUPTCY NOW?

In the State of Washington, can a judge order that your wages be garnished to pay off a credit card debt.

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