This week I started shopping around for a mortgage to refinance my rental property.  I had originally purchased this property using a home equity line of credit (HELOC) on my primary home.   So the plan is to refinance the rental property and pay off the HELOC.   I had planned on waiting until working my FICO score back up above 700, thinking that would make a significant impact on loan terms. As of now, my FICO score as reported by Equifax is 696. With the recent drop in mortgage interest rates, I want to be sure to be ready, so I began shopping around. I checked a number of locations, including my local credit union, my insurance company (USAA, which also has a banking, credit card, and mortgage business), and the company I've used for my last two home refinances, www.internetmortgage.com, which is actually Bank of Blue Valley (BBV) out of Overland, Kansas. My credit union (Ent Federal Credit Union) had the best application process I've seen.  If you're like me, you get frustrated typing account information, knowing the bank pulls all that information from the credit reporting agencies anyway.  Well, Ent pulls the information right into the application, after confirming that its OK to check credit.  Very refreshing.

My credit card debt crept up slowly over the years, and hovered around $20,000 for quite a while. It seemed that just when I'd get serious about paying it down, another expense would pop up... a major car repair, soccer and hockey registration for the kids, Christmas. My interest rates seemed reasonable, and I got comfortable with the monthly payments as my salary crept up over the years as well. Paying off debt never became a huge priority.

Last year, after months of enticing from "Flip That House", I decided to invest in real estate. My strategy was to "fix and rent", with an eye towards building income for eventual retirement. I bought a bank-owned property in November 2007 with a new home equity line of credit, topped off with some more credit card debt. The plan was to rehab the house using more credit card debt, then refinance using the much higher value of the house as collateral. The result was a ballooning of my credit card debt to just over $60,000.