Posted on: 07th Mar, 2010 06:39 am
I have $65K in credit card debts and LOC. I went to a debt consolidation company. They informed me that they can negotiate with my lenders and reduce my debts to approx $40K. First I have to take out a 2nd Mortage with their provider for the $40K this will include their fees of approximately 35%. They suggested that after 1 year I go back to the bank and take out a LOC for the balance of the $40k and pay off the 2nd mortage. With the LOC I will have a lower rate. I am a little skeptical any suggestion or thoughts.
i did not understand why you have to take out a second mortgage from the mortgage lender of the debt consolidation company. if they can reduce your debts to 40k, then you can make monthly payments towards it and pay it off in few months. i would suggest you to directly speak to your creditor and negotiate with him so that you can consolidate your cards.
If you have the ability to get a home equity line of credit to pay the debt consolidation company, you can just as easily take out a HELOC and pay off your credit cards on your own.
Did the debt consolidation company tell you how their services will impact your credit?
Did the debt consolidation company tell you how their services will impact your credit?