Ok, so I bought my house in 2003. Got a pretty good deal on it. Very nice for the price I paid.

Currently I have a 6.25 FIXED rate. My payment is 600/month with taxes and insurance.

I have made some pretty horible decisions in the past couple years and ran up a couple of my credit cards. Basically I want them paid off NOW!

The value of my house has gone up quite a bit since I bought it. I bought it for 58k and it is now assessed at 70k. I currently owe 56k on it.

I applied on lending tree and have been approved 100% I just need to pull the trigger.

Heres what im offered:

7.40% APR
$676 per month
All fees built into payments I just pay appraisor.
All credit cards paid off plus I end up with about $4500 extra.
This would save me about $90 per month and my cards would be paid off.

Also, they offered me a 30 year mortgage at 7.15% but that has to be paid off or refinanced within 15 years. I doubt Ill still live in the house in 15 years but who knows!

Thoughts everyone?

In this rate and guideline enviroment DEMAND that the rate is fixed for 30 years. Accept nothing else.

NO NO NO!!!

is the security of your house worth some CC debt? you have an awesome rate, and you're going to refi for a higher rate?

1. buy this book
http://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/0785289089/ref=pd_bbs_sr_1/105-9614411-6655614?ie=UTF8&s=books&qid=1180727145&sr=8-1
2. leave your mortgage alone.
3. list your income and make a budget!!! cut out anything frivilous.
4. list your debts smallest to largest. put every penny into paying off the smallest (smallest $$ amount, regardless of APR).
5. when that ones gone, roll that money into paying off the next smallest, and so on.
6. have any liquid savings? keep $1000 and cash the rest out to pay off the debt.

never EVER do a debt CON-solidation.
best advice i got

If it were me I'd do anything to avoid messing with the current mortgage. What you have is a pretty sweet deal compared to those that were suckered into ARMs. Besides, what's to guarantee you won't drive your credit cards back up again and end up in the same situation with a higher mortgage?

Where in the world can you buy a house for those prices. Here in Northern NJ a broken down shack is over 300K. My son just bid 399K for a 2 bedroom cape on a 75x100 foot lot. The asking is 419.

I mean how much extra is the higher interest rate going to cost me? This is the first offer I got so Im going to shop around. i might be able to get him lower on the interest rate also.

Heres whats going to prevent me from doing that again: A SHREDDER. As soon as this is resolved all my cards are getting shredded.
I know not to touch an ARM with a 10 foot pole. Got that part covered.


Des Moines Iowa baby! Land of cheap homes!

the interest rate does not make that much of a difference on such a small loan balance, so moving up that amount won't be that big of a deal. PM me if you want me to do a breakdown. I would need to know card balances, interest rates, closing costs. I have owned a mortgage company for 13 years. I am not licensed in Iowa, so I can give you completely unbiased advice.

In this rate and guideline enviroment DEMAND that the rate is fixed for 30 years. Accept nothing else.

i only advocate 15yr fixed terms :)

I mean how much extra is the higher interest rate going to cost me? This is the first offer I got so Im going to shop around. i might be able to get him lower on the interest rate also.

Heres whats going to prevent me from doing that again: A SHREDDER. As soon as this is resolved all my cards are getting shredded.
I know not to touch an ARM with a 10 foot pole. Got that part covered.


Des Moines Iowa baby! Land of cheap homes!

Try one of the online mortgage calculators to see what the difference will be. Think total cost - not just monthly increase.
http://www.mortgage-calc.com/

You say you can do it but the Dark Side is strong my young Jedi. You will be constantly tempted by the credit card companies bombarding your mailbox!

15 year terms are great, just not overly practical in most markets. you can always pay extra to your 30 yr

I mean how much extra is the higher interest rate going to cost me? This is the first offer I got so Im going to shop around. i might be able to get him lower on the interest rate also.

Heres whats going to prevent me from doing that again: A SHREDDER. As soon as this is resolved all my cards are getting shredded.
I know not to touch an ARM with a 10 foot pole. Got that part covered.


Des Moines Iowa baby! Land of cheap homes!

cut em up now then work on my post ideas :)

Damn, I had no idea Des Moines real estate was so cheap. I paid about $127,000 for my house in 2003, but the good part is it's now probably worth $160,000-$170,000. And I have a 5.625% 30-year loan.

I think Urby's advice makes sense. My ex-wife drove me into bankruptcy, but at least I kept my house, and since I'm still making payments on that, plus paying on part of the debt, my credit may not be completely ruined. But I have no CC debt and plan to keep it that way.

In the past year and a half, I've learned to live within a budget, and I'm pretty anal about it. I track everything and make adjustments as needed. Quicken and an Excel spreadsheet are your friends.

Yeah youre right Gary. I really need to be more mindful of my budget. I have a rough budget but I need to make it more precise and not spend so much damn money.

At this rate I would be paying off my credit cards for the next 100000 years. Not to mention it is driving me nuts and I want it off my back.

Nick--make sure you have all the details before you sign on the line. Does the "new" payment include taxes and insurance? Also, if you have a 100% loan you will likely be required to carry mortgage insurance, which will bump the payment. I believe that typically you have to put 20% down to avoid mortgage insurance but that may vary from state to state.

Yeah youre right Gary. I really need to be more mindful of my budget. I have a rough budget but I need to make it more precise and not spend so much damn money.

At this rate I would be paying off my credit cards for the next 100000 years. Not to mention it is driving me nuts and I want it off my back.

with a determined effort, motivation, and a "Ive had enough" attitude, you CAN pay off the CCs within 1-2 years and not **** up your sweet mortgage.
buy the book, hell i'll buy it for you if you promise to follow it :)
it has budget forms and a complete "how-to"

Heres a better idea.

How about I just fix up my house a bit and sell it? I can then move in with one of my buddies and put the leftovers in savings until I want to buy another house.

NO NO NO!!!

is the security of your house worth some CC debt? you have an awesome rate, and you're going to refi for a higher rate?

1. buy this book
http://www.amazon.com/Total-Money-Makeover-Financial-Fitness/dp/0785289089/ref=pd_bbs_sr_1/105-9614411-6655614?ie=UTF8&s=books&qid=1180727145&sr=8-1
2. leave your mortgage alone.
3. list your income and make a budget!!! cut out anything frivilous.
4. list your debts smallest to largest. put every penny into paying off the smallest (smallest $$ amount, regardless of APR).
5. when that ones gone, roll that money into paying off the next smallest, and so on.
6. have any liquid savings? keep $1000 and cash the rest out to pay off the debt.

never EVER do a debt CON-solidation.
best advice i gotNICK!! This is the best advise you'll see in this thread man!!! This is gold!!

Look, I know where you are, I've been there myself and if I had it to do over I would follow Urby's route. Here's the thing (let's get real with it) you 'fix' it now and what's to stop you from doing it all over again? I know how bad you want this monkey off your back but you will be SO much better off leaving your home mortgage be and paying off the CC's as Urby said.

It seems to start out slowly but as you knock off the first smallest debt and roll the payments over to the next you will see the debts begin to drop off exponentially! You will learn priceless things;

1. You will learn to budget.
2. You will learn patience.
3. You will appreciate the value of things you want and need and better prioritize them.
4. You will gain much more home equity value in the long run by leaving your mortgage alone (don't even think about a 2nd!!!!).

It's your decision and your life but man........

thanks Kev

Heres a better idea.

How about I just fix up my house a bit and sell it? I can then move in with one of my buddies and put the leftovers in savings until I want to buy another house.

why? your problem is not because you have a sky-high mortgage! you have a sweet APR and payment, and there isnt just much room to go "down". i'd never advise selling a house unless the payment exceeds 30-ish percent of your take-home....even then you can get a second job at UPS to help in the short-term while the debt is killed.
kill the debt and be happy your mortgage payment isnt 2300/month :hide:

when the debt is gone, take all that money you were making on payments and SAVE it....then never EVER go in debt again! cash rules!

Better yet, if you have a spare room let a buddy move in with you. Use his "rent" to apply to those credit card bills. You'll still have your investment (the house) and take care of those bills in the meantime! :highfive:

I only have one more CC bill to go! Unfortunately it is the biggest weighing in at 3,000 dollars. I got a 450 dollar payment going out today. One next month, the month after, and one month after that. Then car insurance :(. Haha. But I am going to try and get this one paid off within the year. Now that all my others are off me I can roll it all into this one. Once it is paid off and closed I am going to save up for a little while and put a nice down payment on my next vehicle that will be in MY name instead of my parents. Also, hopefully I can get the Fleetwood sold and that will save me 160 dollars a month I can put into the last card. Then after I buy the car I am going to start saving and hopefully buy my own house. We'll see.

When I was young I was so foolish. I was handed great advise and I never paid attention to it or put it into action. If I had, I would probably be cash rich (I mean rich!). This was before I got married and started a family, you know, before I really began to create expensive responsibilities for myself. Two things I was told, here they are;

1. When you get a raise, take the net difference of your new take home pay and put it in savings.

2. (This ones the best. Are you ready? OK, here it is...) Take 10% of your gross pay out of each check and put it in a savings account. Open an account that is difficult or inconvenient to get to. One that is not tied to your checking electronically. Deposit this faithfully and forget that you have it. When the amount increases enough then take a portion and put them into CD's for higher interest earnings.

Now, these things are not just for the young, they can be implemented at most any age and benefit the person.

agree w/ Kev, but only after your debts are paid off.
when debt-free but the mortgage, concentrate on saving 15% of your gross pay for retirement. be sure to also have 3-6 months of expenses in liquid savings for emegencies. etrade.com has 5.05% apr savings account with no minimum.
any "left over" cash after investing the 15% goes to the mortgage.

Yall are right. Its time to man up and fix this shit.

If I can get it refinanced for 6.50 or better then Ill do it. Otherwise I will just have to man up and cut my spending. First step is going to be to quit smoking. That will save me a bunch right there. Then Im reducing my satelite tv package.

The main thing that has really cost me has been going out ALL the time. Whether its drinking or going out for food. Thats all over with and IF I do go out drinking Im getting bent at home beforehand to avoid spending a shit-load at the bar/club.

Im the type of person that can do almost anything I put my mind to. Time to apply that shit again.

Good luck, Nick! You can do it. :highfive:

A tip for you young guys...if your employer has any type of company-match savings plan, JOIN IT. Max that sucker out; pay yourself FIRST through payroll deduction. If you never see the money, you'll never miss it. In a few years you will be amazed at your net worth. :thumbsup:

Ahh the old financial conundrum. What to do?
I can't say I have done everything perfect, and frankly, I almost wish I was in your shoes.

I don't have any credit card debt to speak of but I do have a $600,000 mortgage to pay.
Our payment is nearly $4,000 a month. Our credit card bill is also $3,000..... a month.
We pay for everything on our primary card for daily shopping, gas, food, whatever and then pay it off each month to a 0 balance. We get miles and about every 2 years we take a free family trip somewhere in the country.
My wife is in charge of savings, her job has pretty strict policies about retirement plans and she pays 11% into it and they match some I think.

Our Mortgage is carried with Wells Fargo, stay away from them. In my opinion they are crooked as a dog's hind leg. They lied to us, ignored us, didn't do what we asked, and now they sell our information to every schmo who calls them on the phone. I can't stand them but I am not in a situation to get rid of them right now.
I didn't much care for Bank of America either, but at least they were honest with us.

I have an equity line of credit I use for emergencies and we are into that about $10,000 right now at the prime rate -.25% (I think).

We have a 10/1 ARM that I plan to ditch as soon as the 10 is up since I hate this bank. It gave us a really good rate of 5% (since they lied to us and we complained) so for now it is worth dealing with them.

Getting a hold of credit card debt is really hard.
Make sure to keep your credit cards (at least 1 or 2) but just put them where you can't use them. Closing all your credit card accounts will lower your credit score, even if you get them paid off.
It is best to keep your accounts and just quit using them. You have to decide if you can avoid the temptation. Lower your lifestlye a notch if you can. Just remember to remind yourself that you have no money. That helps me.

Do not sell your house and move in with someone just to get out of credit card debt. Owning a home is one of the smartest things you can do for yourself. These days most homes are a great investment.
In the last 6 years we have increased our net worth almost $400,000 by making smart real estate choices, I don't want to go back to square one.

Once you get your credit cards paid off I would recommend using them the way we do. Use them for day to day expenses and pay them off each month. Wait until you have enough money saved up for something big to buy it. Cut your "operating expenses". Do things to reduce your utility bills and look into buying a cheaper TV service. You can only watch one channel at a time and odds are you only watch a few anyway. See if a cheaper local service has your favorite networks and maybe even switch (unless you are in a contract).
If your credit card bill exceeds your ability to pay then reduce your spending so you can pay the bills monthly like I mentioned.

One place I found to really save money was on telephone service. I was paying for 2 land lines and 3 cell phones. I dropped the land lines altogether saving about $100 a month, then changed phone services and saved almost another $50. Shop around. You might even be able to adjust things like your internet service to save a few bucks a month.
Eat out less, grocery shop more. Learn to cook (if you don't know how already).

I have always found Suze Orman to have good advice about money. Look over her website and really think about the things you do before you do them.

I wouldn't be where I am without my wife and her brains. It is hard on your own to manage investing and debt.
When I met her I bought stuff on credit all the time, I had $15,000 in credit card debt and a $300 a month house payment. She helped me get rid of the CC debt and work my way to some real security.

I would only use a refi as your last ditch effort.
You can even contact the CC companies for assistance in paying down these debts. Don't ignore them, have them help you.
Some companies can help you by freezing your spending and giving you a special interest rate until you pay it down. They are more than happy to charge you 24% or more if you default but they'd rather help you get control of your finances.

Sorry to ramble, I hope you can find some good advice in all that.
I know how you feel, I used to be there.
It will probably suck for a while but I am betting you can do it.

Good luck!

My house payment equals 50% of my take home pay!Ouch!!!!!!!!!!

oops....thats too much!

These mortgage stories make me glad I live in Texas. :alchi:

Good luck, Nick! You can do it. :highfive:

A tip for you young guys...if your employer has any type of company-match savings plan, JOIN IT. Max that sucker out; pay yourself FIRST through payroll deduction. If you never see the money, you'll never miss it. In a few years you will be amazed at your net worth. :thumbsup:

Great advice to pass along!
My last two companies matched 50% of my deduction. You can't get rates like that anywhere. Plus my deduction came off of my taxable income, another significant savings!

My house payment is almost equal to 100% of my monthly income!
Luckily my Wife pays the Lion's share of the thing and I pay about $1,300 a month.

Wowser. :alchi:

Thanks for all the great advice everyone!

I have reconsidered this whole thing. Im young and I want enjoy myself. Unfortunately I did a little too much of that over the past couple years. I have my budget in check now and I just want the cards paid. i can cut back to pay off the cards but that will affect my wild lifestyle that I enjoy so much.

Obviously I wont be refinancing at 7.4%. That would be REALLY dumb. I have contacted one of my buddies that does mortgages and hes seeing what he can do for me. i have also let the guy with the origional offer know that i will not do anything over 6.5%. If I cant get this done at 6.5 or better than I guess I just have to live the boring life for the next year or so while I pay my cards off.

My house payment is almost equal to 100% of my monthly income!
Luckily my Wife pays the Lion's share of the thing and I pay about $1,300 a month.

who wears pants in ur house lol
j/k

She makes the money that is for sure... I am allowed to wear pants, let's leave it at that. :histeric:

oops....thats too much!
Let me put it this way,my job earns me new money.If I get in a pinch I can always use the old stuff:) .

use some old money to drive down to see me :)

Ok kids, great news!

My buddy got me going at 6.5% fixed FOREVER. This deal pays off my cards and gives me about 4k in the bank after I get my 1100 out of my existing escrow.

I currently pay about 200 per month on my card minimums. We all know how long that would take to pay back. I dont want to change my lifestyle and cut back to pay them off.

As I said before- running the cards up again wont be a problem at all. I have gotten significant raises in the past year and a half to fix my budget.

The cost to get my escrow up to where it needs to be is 1605.

My new house payment would be 622 per month which is 30 higher than my current 590. This is saving me about 170 per month.

Now, there are some fees involved. When I told my brother the fees he got his panties in a bundle (he works for wells fargo). The total fees for the whole deal is 2924. This includes appraisal, state transfer fees, etc etc. My brother seems to think this is too high. What do you guys think?

Whats everyones thoughts on the whole thing?


Thanks again for all the help guys! Sure is nice havin you old timers around to steer me in the right direction!! HEHEHEHEHE

Nick--you still need to quit smoking, babe. :highfive:

Nick, straight up, I still say Urby's original advise is your best and smartest bet. I understand you're still young and don't want to give up some things. Which ever way you go will be a trade off for something in your future. You're the one who will have to estimate the value there and you're the one who will have to live with the results.

I wish you the best and hope that the decision you make brings you prosperity rather than regret.

:thumbsup: