I am one of those home owners being hit with an ARM! My ARM term changed this summer and my payment increased about $350 more monthly. I was thinking of a refi to lock my interest (probably will end up paying about the same monthly amount as I am now) but would get cash out to pay off my credit card and my husband's car (taking care of those two monthly payments) and leaving enough for a rainy day or month! On the other hand my friend told me that because of the mortgage crisis, many banks are letting borrowers get into another program. She told me to call my bank and tell them I can't make those high payments and they would probably rather give me the original payment (or close to it), change my loan terms without any refi closing cost associated with this and prevent foreclosure, but won't have any cash out options to eliminate the two debts I need to take care of. Status quo is not an option because I can see myself losing the house in a year or so if I don't eliminate some debt.
2007-09-01 14:03:00 · 3 answers · asked by lasm97 3 in Business & Finance ➔ Renting & Real Estate
that other program is FHASecure..and not many lenders offer it. It hasnt been out yet...but not many lenders are FHA approved lenders.
I would recommend consolidating all your debt..and using the extra money to build for reserves.
it's better to pay tax deductible interest on a house...then to throw it away on car payments. car payments are high...and it's better to be applying that payment towards a mortgage to build equity.
a lot of folks will tell you to leave it alone...but that doesnt make sense. IF YOU ARE STRUGGLING then you need to pay it off or you will LOSE EVERYTHING.
everyone's car payments are around 300-400..and it's better to be paying ALL YOUR DEBTS down..and start building a savings account.
2007-09-01 15:33:15 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Refinancing is a must because your monthly payment is only going to keep increasing.
BAD IDEA to lump your vehicle payment into your mortgage. WHY would you essentially pay on a car for 30 years when that payment will be gone in the next few anyway. I mean, once you purchase a new car you're now making that payment AND you're still paying on the old one. Doesn't make sense, does it?
If you're only making the minimum monthly payments associated with the credit card, you might save money by refinancing that into your mortgage, but most people can't stand to see they have a credit card with a $0 balance and wind up maxing out their credit soon after the refi & are in even worse of a situation afterwards.
If you want no-nonsense advice about how to eliminate debt, go to www.daveramsey.com
He's helped a lot of people get on track, but be prepared for brutal honesty.
2007-09-01 15:31:22 · answer #2 · answered by Roland'sMommy 6 · 0⤊ 0⤋
Refi and get a fixed rate mortgage. But do not roll your credit card and car loan into that mortgage. That's how folks get themselves in trouble. While the mortgage interest rate might be less than the credit card or car loan, the length of time to pay it off would add thousands of dollars of extra interest.
Not to mention that with the credit cards paid off, folks tend to start running them up again.
Also, when you refi and pull out cash, Mr Tax Assessor comes along and you just might get an increase to your property taxes.
2007-09-01 14:41:48 · answer #3 · answered by bdancer222 7 · 1⤊ 1⤋