Refinancing My House

I have a pretty substantial credit card debt with high interest rates. I have some equity in my house but not a lot of income. Does anyone have an advice for getting a better rate on my credit card debt? I have thought about rolling my debt into my house payment but it is a little scary. I have heard horror stories about last minute charges, hidden costs, etc with refinancing. At any rate, this seemed like a good place to post this request.

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Janet

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March 18, 20040 found this helpful

I don't know much about house refinancing but here are some good tips on debt reduction from About.com

"- Quit charging anything. Now.

- Make a list of what you owe and concentrate on paying off the smallest bills first. Forget the interest rate; forget the number of payments left. It's easier to pay off a $150 bill than a $1500 bill... so do it.

- Every time you pay off one bill, take what you would have paid on it and put it toward the next one.

- Work toward saving money in other areas and put that money toward paying down a bill.

- If you can make extra cash, earmark it for a certain bill, until that bill is paid off.

- Even if it's only pocket change, hold on to what you can until you get enough together to add an extra few dollars on the payment. Even five or ten dollars will make a difference, so don't think they aren't enough to bother with.

- Don't ever miss a payment. But when you do, make it up as fast as you can.

- Promise yourself a small treat when you pay off the next debt."

http://frugalliving.about.com/library/weekly/aa082498.htm" rel="nofollow" target="new">http://frugalliving.about.com/library/weekly/aa082498.htm

The Dollar Stretcher has some great tips in their archive.

http://www.stretcher.com/" rel="nofollow" target="new">http://www.stretcher.com/

Here's an article I found here at ThriftyFun

http://www.thriftyfun.com/tf859164.tip.html" rel="nofollow" target="new">http://www.thriftyfun.com/tf859164.tip.html

Hope that helps :-)

Cindy

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March 20, 20040 found this helpful

I agree with the above advice. The better your credit rating, the better your interest rate will be. I don't know where you live, but you state you have equity in your home. You don't need to refinance, you can get a home equity line of credit. Check with your local credit union. I just got a HELOC with NO closing cost (as long as I keep the line of credit open for two years . . . else I pay a $800 fee) My line of credit is 3.5%. (But I have good credit) Go to bscu.org and click on the HELOC button ( http://bscu.org/homeequity/" rel="nofollow" target="new">http://bscu.org/homeequity/ ) Remember, you need to be in the field of membership for your credit union. But most are becoming community based.

Good Luck.

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March 21, 20040 found this helpful

When faced with a similar issue I called all my creditors and explained the situation and stated to them that if we could not get a lower interest rate that I may be forced to transfer my balances to a lower rate company most of them offered to match the rate and those with high balances I applied for their hardship program and got six months interest free as long as my payments were on time. so for those six months any extra from our low income went to those cards first. Good luck and it doesn't hurt to ask.

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March 22, 20040 found this helpful

i would not refinance and roll debt into your house. chances are that when you are feeling that you have freed up more money, you will spend more and not apply extra to your house. you still have the debt-just in a different form. and with the way we live nowadays, you would have to be extremely disiplined to not put yourself back in the same credit card situation. good luck.

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March 24, 20040 found this helpful

First, call all of your credit card companies and ask for a lower interest rate. You just might get it. You mentioned being afraid of hidden fees in the refinancing process. Don't be. Choose reputable banks, mortgage companies and credit unions with local offices and go in and sit down and talk with them. They will help you understand everything. Get copies of all three credit reports first and make sure there are no errors. Find out if you qualify for a lower interest rate on your home than you currently pay. If so, refinancing can save you cash each month or you may be able to shorten the life of your loan without making larger payments. Or you may decide to roll some of your debt into your mortgage. Just remember never to mortgage the full amount of your home. What if you have to sell? There will be realtors fees and you never know exactly what the real estate market will do. Also, be sure to see what you qualify for as far as a home equity line. We're in a similar situation and we kept the credit cards with good rates, refinanced to a lower rate and added a small amount of credit card debt into our mortgage so that our monthly payment didn't change, and took out an equity line. This way we're paying less interest and writing fewer checks.

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March 24, 20040 found this helpful

Refinancing in general is a bad idea. Your playing roulette with your house. Mortgage companies make it sound appealing of course. If you don't borrow money they don't make any money. Your best bet is to call your current credit card companies and tell them that you have been offered a lower interest rate by a different credit card company. Its ok to fib about this. Tell them you are thinking of switching to this other credit card, and ask if they can offer you a competitive rate. They will most likely do so rather than lose your business.

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January 9, 20050 found this helpful

Hello, I have to refinance but I don't want to. Has anybody ever faced this situation? I have credit card debt for the first time in my life and most of the time I can't sleep at night. Thank you.

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January 9, 20050 found this helpful

Hi Eugenia,

We posted this as a new request:

http://www.thriftyfun.com/tf920600.tip.html

Susan from ThriftyFun

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September 26, 20050 found this helpful

I am a loan officer out of Texas and my niche is helping people get out of debt. Credit Cards, Car Payments, Personal and Bank Loans can have very high payments sometimes. There are many advantages to refinancing.

Consolidate all your payments to one.

Lower your monthly bills.

Tax Write Offs.

Whenever you make a monthly house payment you pay interest and principal. All that interest that you pay adds up and you can right it off at the end of the tax year. Now if you are paying interest on credit cards, cars and other loans chances are they are higher and not tax deductible.

As far as hidden fees, any loan officer you deal with should be upfront and honest with you. Be sure to ask for a Good Faith Estimate and compare it to the HUD-1 you get when you are closing at Title. A good loan officer should not be off by more than a couple hundred dollars. I always over estimate.

If anyone of you need to talk or need help please email me at

arthur@preferredmortgageplus.com

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