The New Year is beginning to fade. Time really seems to fly from the period right around Thanksgiving through the first of the year and as people get back into the groove they may also have at a new stack of bills. The holidays are full of gift giving, celebrations and travel but there is a cost to it and consumers know full well that fact. The convenience of credit cards can sometimes lead it to more spending than planned. Now hold that thought for a moment.

Have you looked at interest rates lately? 30 year fixed rates are at levels not seen in nearly two years and as people celebrated over the holidays, rates have quietly drifted lower. Okay, so what about the interest rate on your credit card? Thinking of tapping into your home equity to pay off those bills? You really have three choices:

• Make a payment to the credit card companies
• Take out  a home equity loan to pay off the credit card balances, or
• Refinance your first mortgage, lowering the rate and paying off the credit accounts

Paying off a credit card balance over time means paying so much more in interest compared to other options. If you decide to pay off the balance entirely, perhaps those funds aren’t readily available and if they are maybe there are other more pressing items to pay. So, you decide to pay the minimum plus a little more and revisit the credit card balances next month. Again.

If you currently have a home equity line of credit, that’s certainly an option. The rate on your HELOC is much lower than the one on your credit cards, regardless of your credit standing. And it’s relatively easy to do. Yet you do need to remember that if you’ve had your HELOC for any length of time, it’s very likely the line is interest only and very soon it will turn into a fully amortizing loan. That can sharply increase your monthly payment. Another factor considers HELOC programs are adjustable rate loans, not fixed. If you’re thinking of a new HELOC, adjustable vs. fixed is a major factor in today’s market.

Your third option is to refinance your existing first mortgage and pay off outstanding debt, including any HELOC balance you may currently have. The absolute lowest mortgage rates anywhere are reserved for mortgages in first position on a primary residence. What’s the interest rate on your credit card? 12 percent? 18? 24? You should take a few moments and compare the monthly payments as well as interest saved using a first mortgage to take care of outstanding debt at higher rates.

Everyone’s situation is just a little different and using a first mortgage to pay off debt may not be the best answer. But ignoring the possibility altogether and discounting today’s mortgage rates might not be your best move into the New Year. If all this sounds familiar, pick up the phone and let’s see what we can do for you today.