Need some wisdom?

There are several opinions that exist between various homeowners depending on their financial acumen and tolerance to risk.  This battle then moves between spouses and financial advisors, but really, who is the wiser?

How do you handle money so that at the end of the day - you have the most of it.  Is $1000.00 spent on a mortgage better than $700.00 on a mortgage plus $200.00 to credit cards and $100.00 toward savings.  Savings, yes I really meant to say savings.  It wasn't that long ago that savings was part of the family budget.

A mortgage just short of $150,000.00 will get you a principal and interest payment around $700 at the old rate of 3.750%

According to BankRate.com, a minimum payment on $8000.00 in credit card debt comes to $200.00 per month.  Calculated at 18%, interest plus 1%.  If you continue to make that $200 payment, your card will be paid off in 62 months.  Of course if the minimum payment changes each month and you make the new minimum payment, the payoff takes much much longer.

Now what about saving $100.00 per month over the next 62 months?  Let's say you give that $100 to your financial advisor who invests it and nets you 5% conservatively over those 62 months.  That would get you $7057.00 at the end of 62 months.

All total you are spending $1000.00 per month.  At the end of 62 months, you have paid off your credit card, your mortgage balance is at $134,570 from $146,000, and you have $7057.00 in the bank.

Here's the wise question being pondered.  Pay off that credit card by taking cash out on your property.  Values have gone up in many areas making this a possibility in today's market.

New mortgage goes to $158,000.00 from $150,000.00.  Let's say you loose that 3.75% rate and take on a 4.625% rate, since interest rates have increased.  Your new payment is $812.00 per month.  Leaving you $188.00 instead of $100.00 to give to your financial advisor to invest.

$188.00 invested monthly for 62 months gets you $13,268.00 and your mortgage balance will be $143,787.00.

Therefore at the end of 62 months, you paid out and saved the same $1000.00 per month but in one transaction you have $13k in the bank as opposed to $7k, it sounds attractive.

What are your thoughts?

1. What would you do in month 63?

2. Would you refinance again in year 63?

3. Would you improve the scenario with a lower rated refinance like an adjustable mortgage increasing your monthly investment?

4. Will you live in that house all year?

5. Would you take out more debt?

Love to hear from anyone.