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Question for the Money Doctors

Question submitted on Feb 20, 2013.

Question

Should I consider a home equity loan or
home equity line of credit to pay my credit card debt if I plan to sell my home within a year?

Thank you,

John Bryan

Answer

Either way you are using equity in your home to pay off the credit card debt. Look at the lowest interest rate and payment you can receive for the next year. Both of these uses of home equity will be paid off upon sale of the home. Also, consider cash flow for the next year and see where you want to be or can afford as a monthly payment over the next year til you sell. A quick PS-- also try to save and not spend the monthly savings on paying off the credit cards and using your home equity. That amount that you will reduce in your monthly payment I suggest to put into a savings vehicle.


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