home equity loan

trigger8444 · Joined: 18 Apr 2006 Posts: 1 0.08 Dollars($)

I have about 12,000 in unsecured debt and would like to consolidate them into a lower interest rate and I am wondering what would be the best way to go. Whether it be a home equity loan or some other type of loan. I have only been in my house for 10 months so I don't know if there is a certian amount of time you have to be in your house before you take out an equity loan. If you could give some suggestions I really need to get this situated ASAP.

Thanks, Josh

Guest

Hi Josh,

I don't think there is a minimum time frame for which you have to stay in the house before going for a home equity loan.

A home equity loan is based on the equity built on your house. This is calculated on the appraised value of your house less the mortgage payment which is balance.

You haven't mentioned if any mortgage amount is balance on your house. So, it's difficult to say the amount that you may get as equity loan.

Murphy

blue · Posted: Tue Apr 18, 2006 1:15 pm Post subject:

I am not bothered on how much your home equity is. I shall advise you not go for a secured debt to pay off an unsecured debt.

In that you will put your home in danger. So, don't think of a home equity loan or any other. You may use debt consolidation to pay off debts and that will help you better.

Here is company you may seek help from, regarding debt consolidation.

Blue

Samantha · Posted: Tue Apr 18, 2006 1:27 pm Post subject:

Hi Josh,

Welcome to MortgageFit Forums.

That's a good advice by Blue. You should not take a loan against your house to pay off an unsecured debt.

It will help you to get money at that point of time and lower your payments but it may increase your cash out-going flow by financing for longer terms. In addition to it if you fail on your payments, then you may lose your house.

I think you may opt for debt consolidation where you need to contact one good consolidation company who will make prearranged repayment plans for your debt with your creditors. You will be offered lower monthly payments with lower rates arranges with your creditor.

Another option that you can look for is debt settlement meant for people who can't even afford the debt consolidation program.

Go through some debt consolidation sites and you will get an idea. A good consolidation company will help you to be debt free setting easier terms for you by negotiating with your creditors.

God bless you.

For MortgageFit,
Samantha

Guest

Josh,

Consolidation is a good option to pay off unsecured debts. It help you to become debt free within a short period of time.

Guest

Cool advices!

Josh, don't chance the risk of losing your home. Consolidation can help you pay off your debts. BTW, I'm not talking about consolidation loan, where you need to put your home as collateral. Debt consolidation program will not ask for your home nor will it hurt your credit as settlement does. That is because debt consolidation is so popular nowadays.

BTW, Samantha I like your blog Very Happy

Bill · Posted: Wed Apr 19, 2006 10:31 am Post subject:

Trigger,

I must dissent on the other opinions regarding your stated situation.

The only way I can suggest that you consider a debt consolidation service is if you can no longer afford to make payments on the debt. Debt consolidation companies that negotiate repayment options by effectively locking-in your balance can be devastating to your credit. Regardless of what you are told, you will have no control as to how your creditors will report your 'negotiated' re-payment onto your personal credit. Many times this shows-up as credit counseling or worse - past due balances with missed payments.

Depending on how you are making your current unsecured monthly payments (ie: minimum monthly credit card payments) your existing unsecured debt could take 15 years to pay-off (assuming you don't charge another nickel).

If you are making your current unsecured debt payments on time a fixed rate and term home equity mortgage secured by any available remaining equity in your home could allow you to pay-off this debt at a pace you are comfortable with (such as 5 years) while being able to deduct part of the interest paid (something you cannot do with unsecured interest payments) because the money is now in a mortgage instrument.

The statements about 'losing your home' if you do not make the payments on the new loan are somewhat misleading under these circumstances. Any new loan will be in second lien position behind your first mortgage. In a worst case scenario, if you stop making payments on the small $12,000 second mortgage ... the servicing company will foreclose on their loan seeking a judgment for default. Although this would not be a good situation, it will not result in your losing your home as long as you continue making your first mortgage payments.

I hope that you consider the opinions of everybody that has taken their valuable time to answer your question. Everybody here is trying to help you make the best decision for YOU!

Best of Luck!

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