what do you think of 125% appraise value of your home for a debt consolidating loan?
Dec 26, 2008 Debt Consolidation
Me & my Hubby just brought a house in an area that is not fast for equity, 8 months ago and we only made a 5K equity, we wanted to consolidate our debt but there's no enough equity that we can used, and his credit score is not so great, I talked to few lenders and they denied us because of these matters, not sure how are we goin to consolidate our debt if no one give us a chance.
we also do not want to take a chance of refinancing we have a great 6% interest from the VA.
Debt consolidation loans are overated, and if you don't have the discipline to make it work, are hazardous to your financial health.
This article gives more information:
http://www.searchlightcrusade.net/posts/1142494469.shtml
125% loans are all full recourse loans, and they've got some other ugly features. There are times when they are cost effective, but if something happens you are hosed.
December 27th, 2008 at 12:20 am
kinda of scary to owe more than you home is worth. If you plan on staying in the house for a while then i would do it only if it will save you money. And any extra money you have each month pay it toward the house.
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I work for a Mortgage Company
December 27th, 2008 at 12:56 am
Personally I think it is a bad idea. You will owe more money on your house than it is worth. You will still have a new loan, with closing costs & higher payments. If something happens and you need to sell your house you will be in worse trouble than you are now, especially if market values decrease in your area.
Instead, just cut up your credit cards and keep paying them down.
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December 27th, 2008 at 1:42 am
Debt consolidation loans are overated, and if you don't have the discipline to make it work, are hazardous to your financial health.
This article gives more information:
http://www.searchlightcrusade.net/posts/1142494469.shtml
125% loans are all full recourse loans, and they've got some other ugly features. There are times when they are cost effective, but if something happens you are hosed.
References :
Loan officer
December 27th, 2008 at 2:20 am
I agree that you should not touch your 6% fixed rate.
125% LTV loans come with high interest rates and, like a previous person mentioned, you would really be in trouble if you had to sell your house and owed more than what it was worth.
You probably wouldn't be approved for a 125% LTV loan with bad credit anyway.
As far as paying down the debt, make a list of your debts and their interest rates. Pay a little extra (even if it's just $5) every month. Once you get that one paid off, put that $5 (or whatever you can afford) towards the one with the next highest interest rate. Once that is paid off, do the same with the next one. Repeat this process until everything is paid off.
Or you can take the debt with the lowest balance and pay a little extra on it every month, then when that's paid off, do the same with the next one, etc. You'll get a psychological boost and feeling of accomplishment quicker than the first method described. You may need this to help you stick to your plan.
It may take a while, but you'll eventually be debt free.
Best of luck.
Your house is actually gaining equity…you can always access that equity later, if you still need to.
References :
http://commoncentsadvice.blogspot.com
http://www.leahifft.com
December 27th, 2008 at 2:41 am
It's a great idea as long as debts you are trying to payoff have higher interest rate than your new debt.
Sincerely,
Vladimir Rozumniy
Sr. Vice President
American Mortgage and Real Estate Group
Tel: 323-428-5944
Email: info@amregroup.com
http://www.amregroup.com
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