This deals with a hypothetical personal finance situation so hopefully this is the best place for it. These numbers are made up, but should accurately reflect a situation someone could actually face.
So let's say you have a mortgage of $100,000 at 5% interest with PMI amounting to ~$55 a month.
You get a credit card offer from your bank for a limit of $10,000 with 0% interest for 2 years.
You get the card and use it to pay off $10,000 of your mortgage. This also results in you reaching the threshold where you no longer need PMI.
The results of this are that you have to pay ~$415 each month for 2 years to pay off the credit card entirely by the time the 0% expires. However, you owe less interest and no PMI now on your mortgage, netting you roughly $100 a month savings for 2 years for a total savings of $2,400.
My questions:
1. Is there anything I'm missing such that the math is incorrect or this wouldn't be allowed?
2. Is it worth it?
So let's say you have a mortgage of $100,000 at 5% interest with PMI amounting to ~$55 a month.
You get a credit card offer from your bank for a limit of $10,000 with 0% interest for 2 years.
You get the card and use it to pay off $10,000 of your mortgage. This also results in you reaching the threshold where you no longer need PMI.
The results of this are that you have to pay ~$415 each month for 2 years to pay off the credit card entirely by the time the 0% expires. However, you owe less interest and no PMI now on your mortgage, netting you roughly $100 a month savings for 2 years for a total savings of $2,400.
My questions:
1. Is there anything I'm missing such that the math is incorrect or this wouldn't be allowed?
2. Is it worth it?
via JREF Forum http://ift.tt/1pVuY86
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