ok, my situation is that I have a huge amount of credit card debt and a few other loans. I am not a "big spender" and financially responsible but a few "curve-balls" that life has thrown me has left me in a hole I don't know if I can climb out.
What I am hoping to do is either do a debt consolidation loan or maybe 2nd mortage. I own a home but other family members stay there and I was hoping to one day own one for myself.
So I guess my question is what are some of the pros and cons of debt consolidation. What would I do or need to do to take out a home equity loan?
2007-01-23 03:37:59 · 4 answers · asked by Anonymous in Business & Finance ➔ Credit
The main problem with debt consolidation and a 2nd mortgage is that one more curveball can leave you (and your relatives) without a house.
There are alot of nasty people out there who don't give a damn about you and will offer "debt consolidation" and make you think you are getting into a better deal but they just want you to default so they can get your property.
But, there are also some not-for profit debt counseling services that will advise you. Some are sponsored by reputible lending institutions to help people just like you. I'd go to a bank and ask one of the loan officers for a recommendation.
2007-01-23 03:45:53 · answer #1 · answered by Anonymous · 0⤊ 1⤋
the advantages of consolidating using the house as collateral are
1: a lower interest rate because the loan is secured
2: if you itemize your tax return the interest is tax deductible
But you need to be careful to not start running up the cards again and also when you get the the loan make it a fixed rate one so the interest doesn't start going up a year from now. Generally this would be a fixed rate on a home equity loan not a home equity line of credit.
2007-01-23 03:53:25 · answer #2 · answered by Aviator1013 4 · 0⤊ 0⤋
The following site has centers for both debt consolidation and equity loans. They have great information and free quotes on both. Just use the menu on the left to look through both centers.
2007-01-23 04:37:30 · answer #3 · answered by Anonymous · 0⤊ 0⤋
You are in the same situation I was in five years ago. Today I am debt free, except for my house.
The solution for me was not to take out more loans, but to increase my income. For me, this meant longer hours in my business. For others this means working extra hours, or getting a second job, working nights or weekends.
There is no easy solution. The only thing I can offer is encouragement. I went from $120,000 in debt to $0 in about 3 1/2 years. It can be done. If you want reference material and step by step instructions, I would suggest Dave Ramsey's "The Total Money Makeover".
http://www.daveramsey.com/shop/The_Total_Money_Makeover_P123C31.cfm
It is only $15, and can walk you through the process I used.
Good luck!!!
2007-01-23 03:53:21 · answer #4 · answered by J.R. 6 · 0⤊ 0⤋