Reply #7: When you sell the house, you pay back a lump sum, otherwise the money

[radwriter0555]

borrowed is stretched out over 30 years... and on 100K, it's only a couple hundred a month.

Many people consolidate credit card and car debt into the lower priced loan, stretching it out, essentially, over that 30 years.

If you're selling soon, it's a REALLY good way to get cash and lower the high interest debt load.

For example, I wanted $5K to update and spruce up the house for the sale. So I added that amount to the $3K I needed to pay off the 12% emergency loan I needed for my dog's operation, and to the $6K in credit card bills and about $3000 for two trips abroad. I still have a lot left over, collecting money market interest rates, having refinanced the house adding on an additional $30K at 4.9% interest. I knew I was selling within a couple months, so I went with a super low rate with a balloon payment in two years, but no penalty for selling. So I borrowed the money VERY cheaply and am paying it back long before the variable kicks in.