Help with Debt Consolidation

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I'm sorrry, I hit the submit before I finished the reply.That's me above.

I look foward to hearing from you all.
Thanks
Tom

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Hi Tf,

Since your debt is more than your income, I think a no ratio cash out refinance might help you. You may talk to lenders about this as your credit score is pretty well.

Caron

Hi Tf,

I find people like Eric, Tony and CKalvesmaki giving you some great advice here. Smile

I don't know what's your age, but is there any chance that you qualify for supplemental social security because the social security is the only income that you have. Regarding the credit card debt, you can approach debt consolidation companies for it – they can help you consolidate your debts. But they'll charge you a certain amount of fees and consolidation will also affect your credit.

However, if you need to get out of debts, you may have to consolidate them. Now, if you wish to consolidate both the home equity loan and credit card debt, then go for a cash-out refinance of the equity loan such that the combined loan amount can help you pay for both the debts.

In order to cope up with the payments on the refinance loan, you may need extra income and that might be possible if you get an add-on benefit along with your social security and that's the reason I suggested that you may consider taking supplemental social security income along with the social security.

Good luck and do ask us if you have further queries.

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Thank you for the replies....................And thanks to this forum

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.80 Dollars($)

Hello Tf,

A cash-out refinance of your home equity loan will help you to get a new loan higher in amount from the existing one, with which you can pay off the present loan and the excess may be used to clear a portion of your credit card debt, if not fully.This could be a no-ratio loan as your debt-to-income ratio is quite high.

For information on cash-out refinance, you may look here http://www.mortgagefit.com/discuss/cashout-option.html

You can also contact debt consolidation companies to manage your credit card debt.

Since your only source of earning is the social security check, you have to see if you can manage the new loan as well as the credit debt.

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Thanks for the reply!

evolovik26 · Posted: Wed Oct 17, 2007 7:18 am Post subject:

hey this was an interesting read
its interesting to see people who are almost too good in our society Smile

I wish you all the luck in your situation. People like you absolutly deserve a break.
Is your wife working?
Even though Eric mentioned above that a no Doc or low doc might be a red flag loan for you it might just work for you if you can get a decent rate. If you can show enough income then perhaps another loan is an option for you. If you get a total of 200k loan at 7-7.25% wich is what you should expect on a no doc loan with your qualifications. (No Ratio loan might work for you as well) you can expect a monthly principle and interest payment of under $1350/mon. This type of loan would involve closing costs but you would not be getting a variable rate likeyou will with HELOC and a 1st position home equity line would end up costing you almost just as much /mon on interest only and will be adjustable. Plus there is no guarantees that you will qualify for one. Remeber you can roll your closing costs into your loan. (just make sure they are reasonable)

Caron

I think Eugene have raised a good point - does your wife earn? It is important because then you will be able to afford more than you can pay now on a refinance loan.

A cash-out refinance is taking out a mortgage loan higher than the unpaid balance of the existing loan on the home. In order to do a cash-out refinance, it's best that you choose a no-ratio loan. This is because lenders offering such a loan will not consider your debt-to-income ratio. Rather they'll consider whether you have a good credit score or not.

If your score is good enough to qualify for such a loan and you satisfy other criteria, then you won't have to pay higher rate of interest.

evolovik26 · Posted: Thu Oct 18, 2007 6:54 am Post subject:

He meant he doesnt want to payoff his credit cards with the equity of his home Smile

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Thanks Eugene,Caron and Jenkin7 for the replies!

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livinginnky · Posted: Thu Oct 18, 2007 4:08 pm Post subject:

I want to clarify that no doc loans can be risky but as Eugene said not all of them are bad. You just need to read the documents carefully. If you can get a good rate on a good program then no doc is a good option.

You asked how a debt consolidation could effect your credit. If you get a new mortgage it won't affect it very much. If you consolidate it depends on how you do it. If you do something like "Consumer Credit Counseling" sometimes lenders will look at it negatively if you ever do try to refinance your mortgage.

Here is what I think is the best way to go. Get a first mortgage instead of an equity line. You can consolidate everything into 1 30 year mortgage. That way the payment should be low enough to let you have some extra every month. You could probably even take out a little extra cash to save to the side. A fixed rate first mortgage should be around 7 to 8% interest. Would have to run the numbers though to see if that would save or not. I will run them shortly and post back.

livinginnky · Posted: Thu Oct 18, 2007 4:19 pm Post subject:

Ok here is what we have.

Payoff current equity loan of $ 124,000
Payoff current CC's debt of $ 55,000
Roll in the cost of new mortgage $ 6,000

You get a check for cash of $ 15,000

Total loan of $200,000
Your new total payment would be $ 1330 plus taxes and insurance for 30 years @ 7% interest.

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Eric Thanks, I really appreciate the help!

I contacted Citibank today and explained to them, my situation. They said, the only thing I could do and the best thing to do with using them, is to apply for a new Equity Loan(Line) to pay off everything. Citibank suggested a $210000.00 line.They said this way I could consolidate and have some extra for an emergency, like you suggested Eric.So, they took my information and said they'd call back. They called back in one hour and asked, if I could get my Kids or somebody to co-sign. I'm embarrassing enough but, my kids don't know and I don't want to tell them. Anyway, it's the debt to ratio problem. They said that they would come back with a counter offer in 24-48 hours.

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Thanks Eric, for those Numbers. I saw your post right after I posted mine.