I got a call yesterday.

**mommy4ever** · 04-23-2008, 01:45 PM

My bank has pre-approved me for a line of credit. That's what happens when you have mortgage with your name on it..lol

I initially declined it.... thinking it not a good idea.

However, I was thinking, that I could consolidate some of the higher interest bills we have into one lower interest. I did the figures, by payoff it is to the tune of $2000 savings.

It makes some sense to do it. I am going to talk to my banker about a few things. He's been our personal banker for over 7 years now. I need to know how closing off some accounts affects my credit for real. We're due to renew to mortgage in 2 years, and I don't want to hinder the approval. Mind you..lol.... mortgage should be the ONLY debt we have then, and dh is the main income, so as long as I don't have any red flags we should be fine....

I don't know..lol

Opinions?

**Jenna** · 04-23-2008, 09:23 PM

I consolidated my higher interest c/c's with a lower interest personal loan. It was nice to have a payoff date, and to know the exact payment each month.

People get into trouble when they payoff c/c's with a HELOC, and then run up the c/c's, again.

I guess just make sure there's no "pre payment penalties" and don't use the c/c's unless you can PIF each month.

**Jenna** · 04-23-2008, 09:25 PM

EDIT: I did the debt consolidation years ago... it has NO reference to my current signature.... those c/c's I PIF monthly without incurring any interest charges.

**FrugalMomof3** · 04-23-2008, 09:34 PM

I say consolidate if you are saving, remember some loans require a loan origination fee and other sorts of fees as well. IF you are using the loan to pay off CC's make sure you dont rack up CC debt again unless you can pay in full (PIF) each month.

**mommy4ever** · 04-23-2008, 09:56 PM

It's not a home equity line of credit. It's a revolving line. Can pay anytime. Dh has one with them. There are no fees, jus tlow interest if you have a balance. If there are I'll walk away..lol.

**Loganberry** · 04-24-2008, 11:04 AM

I would go ahead and transfer. You get dinged anyways for transferring balances anyways. Then close those credit cards. When the time comes to refinance, you may not want to because money spent on closing cost needs to be offset by how much you saved in the interest rate and what you would have spent in closing cost could have gone on your principle and you can always pay extra on your house. Hope that made sense. Take care.

**vigilant20** · 04-24-2008, 11:48 AM

If you are worried about keeping your credit score high, then pay off the cards but keep them open. Part of your score is determined by the amount of credit you have available.

**mommy4ever** · 04-24-2008, 01:30 PM

We're not refinancing, it's a 5 year term that is up then. there's a difference. There are no closing costs when it's a renewal, at least not here, only closing costs are if we renew early, which we wont.

**mommy4ever** · 04-24-2008, 02:01 PM

Ok, I'm back. I decided to open it. However I'm still debating about consolidating. In 4 months I'm down to just 1 payment. So I think I'll call to see if they are willing to lower the interst rate. They are alwasy offering 1.97% to new customers. So i'll see if I can get them to match the rate I'm getting at the bank.

**Frugal Nurse** · 04-27-2008, 06:57 AM

If in 4 months, you are down to one payment.... hold off.

Really! 4 more months is not along time. You KNOW how quickly the mortgage payments come around.

Banks are in it to make money. They are 'banking' on you not handling your money properly. They can tell by your credit history exactly the type of consumer you are.

That's why they called you.

There's your clue.
Pay down just the way you've always been doing. Never mind trying to save a few dollars on interest. You're going to have a bigger problem when renewing your mortgage comes due. The interest rates are up and you may not be able to afford the new mortgage. May I remind you that the banks are in it to make money. Lots of it.

Keep up what you've been doing. It's working.

**mommy4ever** · 04-27-2008, 01:16 PM

Frugal Nurse, I was thinking the same thing. Since we're paying off a bunch of things anyway I'll leave the line of credit alone. After we renew the mortgage in 2009, I'll close off all but 1 CC, and have the LOC. DH and I decided that me having my own is a GOOD thing because if were hospitalized, he's the main income earner, this would keep us afloat. Hopefully we'll have a 6 mo ef built for that type of event. But anyway it stays at balance $0.