In deep and need advise...

iVillage Member
Registered: 09-26-2004
In deep and need advise...
3
Sat, 04-09-2005 - 9:44pm

Hi I'm new to this board but am in need of advise. Six years ago my dh and I bought our house ( a fixer upper) Which is where we began... Here we now are with the same house (although it is now worth double what we paid for it), 3 kids, and a ton of debt.

We have a first morgage, home eq loan, and credit cards. We swore when we took out the loan we would only use the credit cards "for an emergency". Ha I guess I should've cut them up when I had the chance...

Now two of the cards are in collection and the calls won't stop.

I've already spoken to credit councelling who either won't help or want me to pay a very high monlthy payment.

Then I tried bancrupsy attorneys who told me we had too much equity.

So then I tried to inquire about refinancing the whole debt.... Payment is very high and interest is high too b/c our credit score has come down. Plus they want $10,000 in closing costs.

My latest thought was to try to borrow some money from my dh pension plan (very low interset no- fee deal). But this would also involve dealing with the creditors to try to work out a settlement amout since the full balances are too high.

Does anyone have any advise, suggestions, anything??

Just with the mortgage and loan plus living expenses we've been having trouble getting by.... My nerves are shot.

iVillage Member
Registered: 05-28-2004
Sun, 04-10-2005 - 11:12am

Hi there,

Not sure if I'm the best person to offer advice, so please anyone, if this is bad advice please let me know! :) I just feel for you and would like to help if I could. When you talk about refinancing, do you mean including your first mortgage too? Those are really high closing costs so it makes me think this is what you meant. What about just refinancing the home equity loan and adding your credit card debt to it? ELoan has closing costs of "only $199" (at least that is their advertisement)- I think this is for home equity loans as well as lines of credit. https://www.eloan.com/s/show/equity?context=equity&lockdays=30&sid=Pe2YnN26AtFNHe6gO5CUb85T-g4&user=&mcode= When we were thinking about refinancing our 2nd mortgage, our current lender quoted us a rate of 8.25%, but Eloan quoted us 6.25% - not sure why the difference. But maybe it might be better for you too at Eloan?

Hang in there!!!!!

Sorry, just re-read that you're having a hard time paying the existing first mortgage and loan, so maybe this isn't good advice... I just don't know... I think someone else might know better than me. Hang in there!

:) Sara




Edited 4/10/2005 11:21 am ET ET by countrymommy2004

 Photo Sharing and Video Hosting at Photobucket
Avatar for cl_phocid
iVillage Member
Registered: 03-26-2003
Mon, 04-11-2005 - 10:16am

Hi there - I'm so sorry to hear about your situation.


The biggest piece of advice I can offer is that you cannot borrow your way out of debt - whether it's through a 401(k) loan or through ripping equity from your house, it all amounts to the same thing - going into more debt to try to pay off what you have.

All my best,
Danni

iVillage Member
Registered: 03-27-2003
Mon, 04-11-2005 - 2:02pm
I agree with Dani. Borrowing to pay off debt is a dangerous idea. Most people who borrow to pay off debt end up gettin ginto worse trouble because they still run up more debt on top of what they consolidated.
I also agree that you should consider selling your house. That is what we did and we ended up with a place that we love, in an area that we love and is more comfortable for us financially. We would never have considered selling our old house if my DH hadn't lost his job.
If you haven't done so already, try tracking your spending to see where you money goes. For me this was a real eye opener. Not only did I have a realistic view of what I was ACTUALLY spending vs what I THOUGHT was spending, but I also began to see my "spending traps." You know, a little bit here and a little bit there adds up.
Good luck,
Sandra