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| Tue, 02-15-2005 - 1:35pm |
im in a real bad way, details later
in the LONG run which is better
i have 22,000.00 debt
i have 160,000 equity in my home
i owe 115,000 on my home
i have a 5.25% interest now that is a 5-year arm
should i refinance the entire loan?
or
should i take a home equity loan with a fixed rate of 10.75%????
my credit score has dropped from a 757 to a 544 within the last 8 months and I JUST FOUND THIS OUT. I cannot afford to pay any of my bills this month, as my daughter has been critically ill and just had spine surgery and i am not paid when I dont work. Things will be better as far as that I can work again about a week.
I had the debt before her illness but had no cushion and was not prepared for this. Everything is crashing NOW, badly.
when i do the math, the home equity will cost me 100,000 when its paid for in 30 years (of course I could sell my house in 5 years or refinance when my credit score is up again)
and if i refinance the entire home i will end up paying 415,000 for the loan.
this is a difference of about 75,000 dollars
SO does that mean I go with the home equity loan even at a high rate of 10.75? HELP

hello. I'm sorry for your daughter's illness and wish I could give you a hug!
I can only give you my advice. Is your $22K debt credit card debt? If so I would think long and hard about re-financing your home or getting a home equity loan to pay off credit card debt. I have a ton of credit card debt and plenty of equity in my home but I wouldn't do it. And the reason is because a credit card company can not take my house away from me. If I roll that credit card debt into a home equity loan, that puts my home at risk - if I can't pay the home equity loan, they can take my house.
It sounds like you will also probably have continued debt in the future. Before you risk your house, I'd look into another way to somehow make it work - talking to your creditors, debt counseling, or perhaps borrowing from a relative.
I wish you the best of luck.
Travi
i think i need to calm myself down. with my daughter being so ill for the past month, in and out of the hospital, and my son going to court tomorrow, and the financial situation, I am just really stressed out
I agree with the post that at least the credit card companies cannot take my house.
My home is the most important thing for my kids to have right now.
I am so afraid of jumping at a loan offer. The people I talked today made me feel like
they were sharks going after blood, pressuring me to jump, and all of them putting
down the other loan companies.
I have decided to borrow enough from my poor mother again to get through the month
then go to a reputable bank in my area and see about a home equity line of credit and
pay as I can
what do you all think??
One of the loans that was offered to me actually increased the amount of credit card
debt to five times greater than what i actually owed, by the time I would pay it off.
In other words, I owe 20,000, and by the time I pay the loan off, home equity loan
at the outrageous rate of 10.74 for 30 years, i would be paying back 100,000.!!!
Isnt there a better way?
i dont want to have consolidation companies haggle down my debt either
i dont want it on my record that I had to bargin
I think it would be good for you to try to get through this month by borrowing money, and then like you said, deciding on your best option when you are more calm.
Probably what is hiking up your interest rate for a new mortgage is your debt to income ratio load. If you were to re-finance your entire mortgage, and pay off the debt, that ratio would go down and your score would improve. You could then re-finance again and get a better rate at some point in the future.
If I had to choose, I would rather refinance my mortgage and pull money out, than take on an additional payment with a home equity loan. At least you know you can handle your current (and future) mortgage payments.
Good luck to you and I wish you, your daughter, and your son the best.
Another thought with the credit cards. Try contacting them and explaining the situation. Sometimes they have a hard ship plan. We did this with one of ours when our son was so sick. They asked for a letter from his doctor and then dropped our minimum payment down a 1/2, cut the interest rate and didn't charge an over the limit fee. They did this for 15 months. It was the one CC I made sure I paid every month.
Good luck and I hope your dd feels better soon.
Laura