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Financial question for you banker types

Discussion in 'Money & Finance Forum' started by Thelt, May 12, 2005.

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  1. May 12, 2005 at 4:52 PM #1
    Thelt

    Thelt Full Access Member

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    If I have a large amount of credit card debt and I am considering getting a second mortgage to pay it off will it be of much benefit to me if the rate on the second mortgage is not any cheaper than the credit card rate? I know I will get a tax benefit for it but I can not think of anything else that makes it better other than the rate might be fixed on a second mortgage while it is not on the credit card.

    I have pretty good credit other than high credit card balances. I would think I could get a rate better than ten to eleven percent. I am not trying to do a 125 loan. I am looking at ending up with a 100% loan to value after the second mortgage.
     
  2. May 12, 2005 at 5:02 PM #2
    sadic1

    sadic1 Full Access Member

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    Between this and being upside down on your car, you should seriously consider spending less money, or if you prescribe to the VP School of Economics, spend more and make a lot more.

    What was the question? Oh yeah, I think the tax writeoff if the only perk, but that could be a lot depending on how much the principle is.
     
  3. May 12, 2005 at 5:04 PM #3
    slydevl

    slydevl Asshole for the People!

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    Tax advantage is huge. Payments spread over 30 years so are smaller. If you are paying PMI you can try to pay off some of your first mortgage with the second to stop that.

    I would only do this if you know you won't run up your credit cards again though.
     
  4. May 12, 2005 at 6:08 PM #4
    Angel

    Angel Banned From TBR

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    You may only claim the second mortgage as a tax writeoff if the expenditure qualifies which I believe is limited to college education expenses and money spent on your primary or secondary residence.

    Thus, if your credit card debt is from purchases other than to remodel, renovate or repair your home or for college tuition then you can't claim it by simply transferring the debt to a second mortgage.
     
  5. May 12, 2005 at 6:58 PM #5
    barry49s

    barry49s Ain’t good for nothing

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    :trophy:
     
  6. May 12, 2005 at 7:37 PM #6
    slydevl

    slydevl Asshole for the People!

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    Horseshit. You are an idiot.
     
  7. May 12, 2005 at 7:44 PM #7
    Guest

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    yes...I believe he is......interest payments on a home are always tax deductable....I own a couple.....I claim 60K a year in interest alone....all my loans are under 6% and most are fixed.
     
  8. May 12, 2005 at 7:46 PM #8
    slydevl

    slydevl Asshole for the People!

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    Agree. If you transfer your debt into your home then your fucking debt is in your home and it is tax deductible.
     
  9. May 12, 2005 at 8:56 PM #9
    Cattrax

    Cattrax Senior Member

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    Sorry guys, I don't think Angel is wrong on this, 2nd mortgages have to meet a certain criteria to be deductible. Angel has done a pretty good job at defining.

    This is not policed very well so always remember the home equity is for remodeling, renovating and repairing.

    I hate agreeing with Angel.
     
  10. May 12, 2005 at 8:56 PM #10
    mathmajors

    mathmajors Roll Wave

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