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Well, no. He didn't get all of the answers.
The quick math is to add all of the current payments and come up with a
number. Then find out what the new mortgate payment will be (with all of the
other payments rolled it) and see if the new payment is lower than the
current payment. Odds favor that the new payment will be less. (I don't
like the new mortgage, the rate is very high. I think the OP should be
looking at a rate of around 6.250% ~ 6.500%, not a rate hovering at 8%.
The trick is to NOT take all of the avialable equity today -- or to take it
but put it somewhere that it can be accessed but don't access it. Then,
take the difference in the current payment and the new payment and set it
aside in some manner of saving vehicle. If your current payment is $2500,
and the new payment is $2000, then SAVE $50 each and every month.
Alternatively, pay $500 extra each and every month to the mortgage and pay
it off years ahead of schedule. The problem with this plan is that if you
NEED money down the road, it will be locked away in equity, forcing a
refinance to unlock it. If you have the discipline to save money, this is
arguably better than paying the mortgage off. If you have not the discipline
to save, then throw the money at the mortgage and refi if needed.
I suggested taking the equity out now and settign it aside. My strategy is
that he might want to make property improvements where the improvement is
worth more than the cost, using equity dollars in this manner makes lots of
sense. Using equity dollars to buy good scotch and fine cigars is a VERY bad
idea.
In any case, take all of your credit cards except a Visa (or your favorite),
your American Express and the bank card where you keep your checking
account, and feed them to a shredder. You might go to dinner, but not have
$70 for the tab today, use the American Express and pay the tab at the end
of the month. Your TV might take a dump, and you have to get a new one, pull
out the Visa and pay the bill in 2 or 3 months, tops. When you need to get a
sack or two of groceries, pull out the bank card because it hits your
checking account right then.
The point is to get your Credit Life in order, and now that you have
transferred all credit to the mortgage, this is the best time to get the
credit moneky off your back.
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Re: Opinion
