Question by hoosier4iu: Prioritizing personal finance…?
I have two issues currently with personal finances…
1) I have around 10k if credit card debt at an interest rate of 7.99%
2) I have a house worth 200k with less than 3% equity in it. The loan was a 5/1 interest only ARM at a 6.658% rate. The ARM is up in September of 2010.
My question is….if you were me, would you work on paying down the credit card as quick as possible and then focus on putting more equity in to the house so that I can refinance in 2010, or would you immediatly begin putting more equity in the home and only make the minimum monthly credit payments for the time being. I don’t believe I am in a position to attach both issues at the same time right now, but I definitely can begin addressing one. My credit score is currently 769.
Thanks in advance!
Best answer:
Answer by Reena
Tackle the credit card balances immediately.
Try to get them paid off before 2010.
No one knows right now where the housing market will be at in 2010.
With any luck you will have a really good credit score, very little to no credit card debt and any lender will welcome you with open arms for the refinance deal.
Credit Scores are going to be the most important thing in the future when you need to obtain new financing for big purchases.
Do yourself a big favor. Cut up the cards and pay them off.
Do not cancel the accounts… just pay them off as fast as you can
and then only use them for little purchases like $ 20 a month keep the accounts active. Of course you will pay off that $ 20 charge every month from now on.
What do you think? Answer below!
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