I'm so glad we did this!!!
When we bought this house, we did not have the 20% down, so we took out a home equity line of credit to cover that 20%. Back then, the interest rate was around 6%. Well, it just kept on creeping up (the interest rate as it was variable) and it was pushing 12%!!!! This was a interest only loan also.
Our credit card was also creeping up. Same story. Started out around 4% and last month was nearly 13%!!!! We were paying a lot extra on it since it was at the top of our snowball debt reduction list.
We ended up consolidating them both into one set loan. A five year loan at 7.95% interest fixed. So now this is at the top of our debt snowball. The payment is about $50 less than what we were paying on the interest only home equity loan and the cc put together.
So it ended up being a win win situation!!!!
Thank you for those who advised me on this situation. We will get both debts paid off quicker now!!! I'll be putting all of my income from my teaching job onto this debt plus what we were paying before, so it should be paid off in about 2 years.....sooner if we get any raises, bonus etc....
Michelle
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