refinancing and school loans

[Gala]

I currently owe 192,260 on my home. I pay 1070/month for my mortgage. My interest rate is 4.7%. My house has gone up in value since i bought it and we plan to stay here for the long term.

I have a student loan debt of 57,000 at 4.375% that i have 9 more years to pay at 409/month

WOuld it make sense to refinance and take cash out or am I better off getting a home equity loan if I can get one at a lower rate to pay off my student loan debt?


I am overall looking to decrease my overall monthly payment for these two loans...if possible.

I wish I was better at this stuff.

I have no credit card debt.

thanks

[bjl584]

I'd try to refinance the SL's. A HELOC has a variable interest rate. While rates are near nothing now, they may be very high 9 years from now.

[dczech09]

So your goal is to reduce your monthly payments. Why are trying to do that? Are your payments too much to handle? Or are you just looking to reduce your payments for the heck of it?

You have the following options:
1) Refinance for a lower rate
2) Extend the period at which you amortize
3) Consolidate
4) A combination

The interest rate of 4.70% on your mortgage is pretty low. Refinancing at today's rates probably would not save you much money after closing costs.

You COULD consider a home equity line of credit, however most will be variable rates and we are at low market rates. So where are they going to go? UP! If you do find a fixed rate home equity, the rate and costs will still more than likely make it more expensive to refinance.

Your student loan rates are low. So I am not sure why you are trying to get a lower rate on those?

And DO NOT... I repeat DO NOT consolidate your student loans onto a home equity! Tha is an incredibly dumb idea. You put your home on the line and subject yourself to more risk.

[Gala]

I am trying to reduce my monthly payments since I am now the only one working outside the home (my husband is our daughter's primary caretaker since she was born in February). Between health insurance for the two of them, and my two loans it makes things a little tight. I am trying to make sure we continue to put money away in savings (currently about 400 a month), and retirement.

[scubatim84]

Well, I agree that tying your home to your student loans is a terrible idea...two monthly payments is better than one monthly payment. In the event you can't make one, worst case scenario you don't pay your student loan payment and your credit gets trashed. This is a lot better scenario than losing your home.

At 57,000, paying off your student loans early is probably going to be out of the question. If you're able to still put $400 a month into savings after everything is said and done, I don't think you're in that bad of shape. I agree that it's a little tight, but honestly, your interest rates on both are already pretty low and you're probably just going to have to play the waiting game. One thing you could do is as your student loans get closer to being paid off, you can make advance payments to get them paid off quicker which will free up one monthly payment. Either way, it's going to take time.