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I have been on Long Term Disability and now SS Disability for 3 years. We have tremendous debt from too much travel and college educations. I need to know if it is better to pay off the debt by refinancing our home. some of the CC interest rates are lower than our mortgage. We have excellent credit and I have paid down a very large cc debt from $54,000 to 17,000 in the last 3 years. However we still have several other cc’s with debt. We plan to purchase my husband’s home when they move into a retirement home in the next 2 years. Is it better to keep paying down the cc debt that is unsecured or would it be better to refinance keeping it at the same term of 10 years left and pay the larger payments on this secured debt. I believe that is probably the answer, but obviously my debt worries me constantly.

First of all, congrats on your ability to pay down your credit card debt, that’s impressive. Assuming you are able to continue to pay off your debts without a problem your best bet is to keep the debt where it is “cheapest” and by that I mean where you will pay the least amount of interest, fees, etc.

You say your credit cards have lower rates than your mortgage but is that a teaser rate that will jump in a few months once the teaser rate expires? I have to assume that is the case since the average mortgage rate is a fraction of a credit card interest rate. Therefore, in my opinion, you are better off locking in a home refinance rate that will not rise as you pay off the $17,000 balance over the next few years. Of course this also assumes that you have a healthy amount of equity in your home that far exceeds the $17,000 you will refinance for since home prices in the next 2 years are not likely to rise much (and may even continue to decline).