I owe $98,000 on my home, and I’m thinking about doing a refinance. I also make about $75,000 a year, and I have $10,000 in credit card debt, plus a $30,000 home equity line of credit. Should I roll my credit card debt into the new mortgage?
Dave Says: I think a better plan would be to simply pay off your debt using your $75,000 income. You’re making good money, so there’s no reason to unnecessarily tack additional debt onto a new mortgage. You may have to roll the home equity line of credit into the refinance just to get rid of it and get a clean title for the new mortgage holder. But don’t refinance stuff you’ve already bought on credit cards over the length of a mortgage. And make sure you refinance to a 15-year, fixed-rate note. There’s no reason to do a 20- or 30-year mortgage, because you have a good income and can easily handle this situation. Just get on a budget, save some money, and you can rebound and get things under control in no time!