I just closed on my first home at the end of this past December. But since I made this move, my credit card situation has gotten out of control. I have several cards that became maxed out during the moving process, and now cant seem to keep up. I haven’t been late on a house or car payment– But my credit cards are now a couple months behind… And I just emptied the bank account paying utilities- so I still can’t pay them. By the time my next paycheck comes around, I will be paying the house and car again.
My mortgage was an 80/20 split 5/1 ARM. What can I do to get back in control here- I would need about 7,000 to get out of these credit cards and to be honest I could use 3,000 to make some improvements to the house.
Do I need to refinance the whole mortgage? Can I just add 10k to the loan somehow or borrow 10k against the house?
My credit was ok when I bought the house, but now its taken a beating due to these credit cards being maxed and late. Help!
The big question is whether you have enough equity in the house to even consider refinancing. If not, the idea of borrowning against the house won’t work, even if you’re willing to pay the cost.
Plus, you need to consider how you got in this shape. It sounds like you’re routinely spending more than you earn, thus your cards are max’d out. How can you get this back in control if you refinance and increase your mortgage payment? You first need to figure out how to stop spending. Taking out more debt isn’t going to help, even if you’d like to fix up the house. A spending diet seems like the most important thing you can do right now. Otherwise, this will be a downward cycle which ends in financial disaster.
DO NOT REFINANCE NOW!!! pay your mortgage and your car.
credit card companies cannot take your car or home away. get your prorities straight, you dont want any more debt on this home as it is already maxed out with your 100% mortgage. you need to tough it out, call up your debtors ask them if you can get into some kind of payment plan and reduce those balances because i am sure they are charging you tons of late fees, and also if your cards are in a collection company do not pay them what they want. all collection companies do is buy your debt from your credit card at a real cheap price and then they try to make a buck from it by telling you, you owe a higher amount than the original. you have 5 years to pay your mortgage and car ontime all the time, credit cards can always be negotiated especially if they are already in collection. you need to build up equity these next 5 years.
cut back on things like eating out often, cable, internet, lawn service, telephone land line.
you can do it just remember you priorities first.
Sorry to hear about your situation. There are two points to consider one is the equity you have in the house and the other is seasoning. The first obviously refers to how much equity you have in the house. If you don’t have equity, you can refinance by using a no equity refinance program. Though the loan is advantageous, it can be problematic if you decide to sell your house and your home is worth less than what you owe to the mortgage company – you will in essence be taking a loss.
Seasoning is how long you have owned the house. Some lenders require about 6 months to 12 months seasoning before they refinance. Some others have no seasoning requirements. We offer refinance loan quotes, if you are interested in a no equity, no seasoning quote.
You can use a 2nd mortgage loan (i.e. Home equity loan or home equity line of credit – HELOC) or you can do a cash out refinance. The difference is a 2nd mortgage is a another mortgage against your house. A cash out refinance loan is the expansion of your existing mortgage loan.
Good luck in whatever you choose to do.