Mortgage refinance advice, please?
Here's the situation:
- Currently owe about $390k on my mortgage, market value of condo is approximately $500k, maybe 5k higher
- Equifax score was 715 yesterday, dropped to 713 after the mortgage broker did a credit check today, he says he won't need a second check because this score is valid for the less-than-120 days remaining until the refinance
- I have 2 large debts: 35k (out of 40k limit, 12% interest) on my LOC and 39k (out of 43k limit, 13% interest) on my credit card
- I'm expecting 15k in refund from the CRA once I file my 2015 taxes (targeting to get this done this week)
I really want to pay down the consumer debt within the next two years.
Current plan: apply the 15k tax refund to the LOC (that way, the money is still available if I run into an emergency), refinance and take out approximately 20k and pay down the rest of the LOC, apply the savings in interest payments plus monthly 2k-ish to the credit card.
All very doable. Now come the questions: I'd like to apply for the MBNA 0% BT card and use that to accelerate the paydown.
What is the impact of doing that on my current credit score? I know it will cause a drop, but how much of a drop, and should I even care, assuming the mortgage broker is correct and won't need to check credit again before the refinance is complete?
Should I do that BT now or wait until after I get my tax refund? (Con: I may only qualify for a lower limit right now, versus after paying down 15k; Pro: I'd have a few months to show regular paydowns on the MBNA card)
Or should I not even bother with the MBNA bit and just focus on the basic paydown?
Okay, before you remind me, yes, I'm aware I'll be transferring some of the consumer debt to my mortgage if I refinance more than I currently owe ... I'm justifying it because of the much-lower-than-12% interest rate on a HELOC or mortgage.
Thanks for any advice!