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Apr 18 2011 12:00AM


I am 68 years old and retired two years ago. I have a home equity line of credit (HELOC) that must be paid in full by 2024. Since I have retired, my income has been greatly reduced and the financial institution is worried that I am going to be in trouble soon. The HELOC is up to date and taxes and insurance are paid. The balance is around $95,000 on a $100,000 credit limit. The financial institution wants to re-write the HELOC as a 30-year mortgage and consolidate another $12,000 I have in credit card debt. Would it be better for me to suffer through paying the HELOC at 2.75 percent until 2024 or accept the 30-year mortgage at five percent? The monthly payments will be about the same, except my mortgage does include escrow.


“If you are trading a monthly payment for your credit cards and the HELOC for a mortgage payment is equal to the HELOC monthly payment, then that should be saving you money on the credit card payments,” said FPA member Ruth E. Delaney, founder and president of Greenleaf Financial Strategies. “I would take the bank’s offer, if it is a 30-year fixed mortgage.”

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