Well, I'm not super-excited about doing this...

**Kimberlina** · 11-16-2005, 02:36 PM

...but we are getting a home-equity loan to consolidate our debt.

We will be a whole lot better off once we do it. We will take the loan for 7 years and pay it off in much less, I am sure. We are getting a really good rate from our bank because our credit is so good, and this way, in a few months, maybe DH won't have to work 70 hours a week.

Our house is set to be paid off in 11 years, and that is if we don't pay a single penny extra. This loan is going to save us a ton in interest on

credit card debt we foolishly racked up after we bought the house. We should have just gotten a bigger home loan (5%) to fix the things we needed to fix. But, we have learned our lesson.

This all came about because of that darned chimney. We are also having a plumber and electrician come in to get some small things done, as well as putting in a shower in the downstairs bathroom.

I don't like the idea of a load, but since we always pay, it isn't like we are puting our house on the line.

Plus, our realtor friend now tells us e can get us $200k for the house we paid $110k for 5 years ago.

So I guess this will be good in the long run.

**forestdale** · 11-16-2005, 02:49 PM

it sounds good to me, Kimberly. You're a worrier. You'll be fine with it after it's done.

Nice increase in your house value.

**Dedlered** · 11-16-2005, 02:56 PM

Kimberly, the interest on this loan is tax deductible too, that's always a good thing

**Kimberlina** · 11-16-2005, 02:59 PM

You know, Laura, our interest rate is so low on our mortgage that is hasn't paid yet to itemize. (Which I guess is a good thing.) Maybe this year....

**AmyBoz** · 11-16-2005, 04:37 PM

I think you've made a wise decision. Good luck!

**SHOPGIRL** · 11-16-2005, 04:44 PM

I think you did the right thing. I'm looking into the same thing. I have a 2nd mortgage, so I may change it to a Home Equity Loan, take out a little extra and finish paying off cc debt. I can relate to your situation; buying a house, then spending more money to fix it up.

**Jenna** · 11-17-2005, 08:44 PM

I did something similar while I was paying down my debt. Took out a personal loan to pay off c/c's... then paid that loan off a year early.

Saved money on interest, and it was nice to have a set payment every month + it helped me to curb my c/c spending (since I had extra disposable income 'cause the loan payment was manageable.)

**Darlene** · 11-18-2005, 10:02 AM

Wishing you luck with that Kimberly. Wow about your house going up in value, makes me wonder if I'm sitting on a goldmine.

**Kimberlina** · 11-18-2005, 10:06 AM

Yeah, I'm really surprised, Darlene, because over the summer my husband (who is closer with our realtor) told me G. was valuing it at about $185k. So I don't know what has changed, but it makes it really tempting to move, even though I love where we are. Of course, I'd have to move to a completely different area to afford another house, so it is a catch-22.

**Katybird** · 11-18-2005, 12:14 PM

It sounds like a good plan Kimberly.

**Shaunta** · 11-18-2005, 05:59 PM

Hi, Kimberly

I was just curious as to whether you will be canceling those credit cards now? Or will you have a home equity loan AND a bunch of tempting open credit lines?

Shaunta

http://www.pennywisejournal.com

**Jenna** · 11-18-2005, 06:13 PM

Sometimes cancelling cards can damage your credit score.

I shredded mine once they were paid off, and cancelled some of the newer trade lines.

**Kimberlina** · 11-18-2005, 07:34 PM

I don't use the credit cards at all. But I did tell DH to call and have the companies lower all the credit lines- we don't need them and they aren't good. DH barely touches them now, and actually, I took all but one away from him.

DH got a little credit happy when he had another job that paid really well that he did from home. It was a contract job and they dropped him in the middle of the contract, and that is where things went kaplooey.

**Shaunta** · 11-18-2005, 09:38 PM

Having a ton of available credit can be bad for your credit score. Because you could go X number of dollars into debt at any moment. If you pay off a card and cancel it, that shows up as good credit on your credit score.

**Kimberlina** · 11-18-2005, 10:02 PM

Yes, I know about the outstanding credit lines, which is why I am getting DH to call them to lower. We only have three cc's, though, so I don't know if I want to cancel them yet. We need them for travel- our family got into a big bugaboo about trying to use debit cards for this purpose a few months ago, and believe me, you don't want to get me started on that. (There is a whol long thread around here somewhere about my #$%^& SIL.)