Pay off credit card Debt -- HELP!!!

iVillage Member
Registered: 03-26-2003
Pay off credit card Debt -- HELP!!!
1
Thu, 09-16-2004 - 11:44pm
oh boy I need some help on what to do

Im a single mom, just divorced with two kids

heres the deal

I bought my house from the divorce settlement in October 2003 (new house) paid 254,000.00. THe house is now worth 305,000.00 (thats what they are selling for in the same neighborhood, same house). Im BROKE!! and i have credit card debt.

My child support ends next june 2005 which is 625.00 a month because both kids will have turned 18 by then. I lose my health insurance with EX and he is self employed with less than 3 employees so I cant take COBRA and will have get health insurance on my own.

NOW HERES THE BIG QUESTION:

do I sell my House now? or do I refinance my house NOW??

heres what I got in refinancing quotes

I have racked up $14,000.00 in credit card debt over the last year from being very sick with bipolar and manic depression and not being able to work. I am on meds now and am recovering. (Just wanted to let you know how I got into this mess)

If i refinance NOW, I can pay off all of the credit card debt and end up with the EXACT same mortgage payment as I have now at at a rate of 5.125% for 3 years (its a 3:1 ARM loan). I do plan to sell this house eventually within 3 years to get the heck outa here and make my money off of it and buy something smaller.

My current interest rate with my current mortgage company is 6.78% and it is also a 3:1 ARM, but I have already used one year of that ARM.

IN other words, I can pay off my credit card debt in full, concentrate on my regular monthly bills and have the same payment at a lower rate for the next three years (even though the payment will be the same as I have now because of hte 15,000.00 to pay off the credit cards), but I am unsure if I should just HURRY UP AND SELL MY house NOW or just CHILL OUT since I have been sick and stay here a little longer and not upset the kids again with moving and refinance, and just try to get by another year or two with the 906.00 a month mortgage payment. ( my taxes and insurance run about 275.00 monthly).

Please, please ANYONE who knows about mortage debt and refinancing, (BECAUSE I REALLY DONT, EX DID ALL OF THIS) HELP ME!!!!!!

All replies are GREATLY appreciated and WELCOME.

PAM

THANKS THANKS

Avatar for cl_beckymk
iVillage Member
Registered: 03-19-2003
Fri, 09-17-2004 - 10:02am

To me in this situation it sounds like I would just go ahead and sell the house now providing you can afford somewhere else to live.


It sounds like the mortgage payment is already difficult for you and you are planning on moving into something with a smaller mortgage payment?