Archive for August 2010

Mortgage Refinance or Use an Equity Loan To Reduce Debt

Should you refinance or use the equity in your home to pay down debt?

o answer this question, you first need to determine how long it will take to break even and how long  you plan on staying in your home.

For example if you had a $200,000 30 year fixed rate mortgage with an interest rate of 7% your monthly payment would be $1331. If you refinanced at 5% your new monthly payment would be $1074 a savings of $257 per month. If your closing costs totaled $2500, it would take 10 months to break even ($257 * 10 = $2570). With this scenario , if you planned to stay in your months 10 months or more then refinancing would make sense.

Deciphering The Credit Score Formula – What Makes Up Your Credit Score?

1) Types of Credit in Use: About 10% of your score 

Credit score calculations consist of complex formulas that take into account both the types of account, their mix and the total number of credit accounts in your name.

Credit account types include: credit cards, retail accounts, installment loans, finance company accounts and mortgage loans.

2)  Pattern of Credit Use: About 10% of your score

The number of new accounts you have and the type of  the account  is part of your score.

Also how long has it been since you opened a new account and the type of account it was.

Debt Programs – Have They Worked For You?


There are pros and cons to enrolling in a debt reduction program.  That includes debt settlement, debt consolidation and credit counseling.

I want to know if you (or anyone you know) have ever signed up for any of these programs and if so did it help you get out of debt?

You can leave a comment to let us and everyone else know.