Ok this is the deal. I own my home valued around $75,000 before the remodel and I have no mortgage on it. Other debts are $25,000 in student loans, $40,000 in personal loan to family and $45,000 in credit card debt. I take home around $2400 a month. What can I do?
2007-03-22 12:35:30 · 5 answers · asked by Rich 2 in Business & Finance ➔ Credit
As a loan officer in the subprime industry I can say I see your situation quite often. You have quite a bit of equity, but your debt to income ratio without paying off those debts you listed is going to be a little high. Certain states have different laws and regulations when it comes to refinancing or home equity loans, so be sure to find out the specifics on your state. I'm in Texas and my company only deals with 80% loan to value of the home.
So, take your $75,000 and multiply it by 80% (.80). You end up with $60,000. This is the amount of money you can allocate to your debts.
As for your credit card situation, $45,000 is racking up interest pretty quickly I imagine. It would be in your best interest to take out a home equity loan to pay for those.
You have to look at the big picture when it comes to debts. These credit cards could be racking up interest rates up to 20%. Most credit cards don't favor the consumer when it comes to their rates to begin with. Just find out how much you're paying them a month compared to one payment with a lender. You're going to end up saving money and at the same time repairing/building your credit for your future.
Best of luck to you in your situation. Unlike a lot of people on here, I don't solicit business, I just try to help out. Just be aware of the new appraisal when you do get the loan. Higher appraised value for the loan can mean higher insurance costs and higher taxes.
2007-03-22 15:11:39 · answer #1 · answered by john_fetzer 2 · 0⤊ 0⤋
If you require extra cash, a mortgage is the right choice for you. If you are not eligible to get an equity line of credit on your home, either due to insufficient equity or a poor credit record that makes banks shy away from lending you completely, you can raise the cash through other means - the cashout refinance. This loan works on the similar basis as the equity line. However it is a regular mortgage with usual terms and is not just an interest-only loan. The benefit that people without adequate equity and imperfect credit is that they can access their minimal equity by switching over to a new regular mortgage, by withdrawing cash when the loan is closed.
2007-03-23 08:27:45 · answer #2 · answered by hendy h 2 · 0⤊ 0⤋
Absolutely do the refi to take advantage of the tax benefits. The other responder had a good idea to refinance the student loans with a consolidation company. I doubt if the credit cards are behind but if they were, you could settle them out.
I recommend Smart Choice Mortgage. They do business in most states and are your best opportunity for someone to say yes. Check out the free evaluation form at the source website and a Smart Choice loan officer will contact you within 24 hours. Good luck.
2007-03-22 20:59:54 · answer #3 · answered by CALIFORNIA GOLD 3 · 0⤊ 0⤋
See if you can refinance your student loan if your credit's improved. Will your family pay you back? The student loans should be paid first because the government will garnish wages until it's paid off... PAY THE MINIMUM PAYMENT ON TIME. Next, put what money you can to the credit card debt. I don't know the terms of your personal loan, but you should try to pay that off, as well. What was the length of the loan?
Do *NOT* put your house on the line for an unsecured debt.
2007-03-22 19:47:52 · answer #4 · answered by Anonymous · 0⤊ 0⤋
try to get help to paid your debt off if you had mortage you could of used the equity on it pay off debts try and get bad loan all my best to you Good luck
2007-03-22 20:11:41 · answer #5 · answered by pattibcacl 6 · 0⤊ 0⤋