Apr 09 2011
I am considering refinancing my mortgage and have an opportunity to take cash. Should I pay off student loan?
First off, my student loan is at 3.65 fixed for an amount of appros 12,000. My refinance rate for my mortgage is about 4.9% x 30yrs fixed. Would it be wise to take out an additional $ 12,000 at that rate to pay off a student loan that is at a lower fixed rate?
No its not – you’ll end up paying more over the long term. Keep the student loan as is; if you don’t then you could be in for some financial hardship.
Absolutely not. Keep paying on the low interest student loan and don’t take cash at the refinancing mortgage unless you need it for an emergency. That cash you “take” will be secured by your home and you don’t want to do that in case you get in a financial bind you could end up losing the house.
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