| Borrow to pay off credit debt? |
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Larry 7
New Member
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| Borrow to pay off credit debt? |
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Hello out there, brand new member here  , and I need some advice and opinions, I'm hoping you seasoned veterans can help me out....
....I've got a mountain of credit card debt (>35k) and it's choking me to death...so what I was thinking of doing was to open a "line of credit" with my Credit Union, borowing against my home and paying off the CC's....
Currently my total payments to the CC every month are +/- $1000, the payment on the $$$$'s I borrowed from my CU would be about $800 per month....
I HATE attaching a lien(loan) against my paid-off house, but the interest alone on the CC's every month is right at $300, and that WILL be increasing in the near future, also my credit is really good (+750?)and I want to keep it that way.....
Anyone want to chime in with a comment?
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Sat Nov 12, 2011 9:26 pm |
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oldguy
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Location: arizona
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Personally, I would put a 30 yr fixed rate 4.5% mortgage on the house, the payment would be $177/m. (Actually I would try to put an 80% loan on the house - so it depends on the value of the house).
I'm age 72, mortgages are currrently at a lifetime low for me. In fact, US owner-occupied mortgages are about the least expensive capital in the world right now - all other nations have various time limits, variable rates etc.
IMO it makes no sense to pay $3600/yr interest just for the shortterm use of $35,000.
But what are your goals? Are you young? Out of work? Needing more credit for living expenses? Or just trying to build up wealth for your family?
1. If you have an over-spending problem - new cars, etc, - then it makes no sense to use borrowed money to pay off borrowed money, that will simply result in running the cards back up - and then you'll have a $35,000 loan plus another $35,000 in new crredit card debt. (Not really - but I mention that becasue it happens to so many young people).
2. But if you have a wealth-building goal, are a patient invester, you can use borrowed capital to invest.
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Sat Nov 12, 2011 10:56 pm |
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littleroc02us
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So here is what I don't understand, you have a paid for house, 35k in cc debt and you can't make the 1k payment each month or even extra. Do you have a job and if so how much do you make each month?
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Mon Nov 14, 2011 2:17 pm |
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Larry 7
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quote:
Originally posted by littleroc02us
So here is what I don't understand, you have a paid for house, 35k in cc debt and you can't make the 1k payment each month or even extra. Do you have a job and if so how much do you make each month?
....well at the moment; $300 of that 1k payment is going to interest, I have NO desire to finance the CC's banks, although I would be paying interest on a HLOC or Mortgage, I don't think it would be at the current level.... 
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Mon Nov 14, 2011 10:00 pm |
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oldguy
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Are you retired? Or working?
In either case, it seems strange to lock your money into a house, and then get a $35,000 loan with 10% or 15% credit cards?
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Tue Nov 15, 2011 12:09 am |
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littleroc02us
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quote:
Originally posted by Larry 7
quote:
Originally posted by littleroc02us
So here is what I don't understand, you have a paid for house, 35k in cc debt and you can't make the 1k payment each month or even extra. Do you have a job and if so how much do you make each month?
....well at the moment; $300 of that 1k payment is going to interest, I have NO desire to finance the CC's banks, although I would be paying interest on a HLOC or Mortgage, I don't think it would be at the current level....
So your really didn't answer my questions. How much do you make each month or one?
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Tue Nov 15, 2011 7:30 pm |
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Larry 7
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Cash: $ 1.05
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quote:
Originally posted by oldguy
Are you retired? Or working?
In either case, it seems strange to lock your money into a house, and then get a $35,000 loan with 10% or 15% credit cards?
I'm working....part time, currently that's all that's available .....the CC balance is something that's been around for awhile, it's grown over time....
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Wed Nov 16, 2011 2:50 pm |
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Larry 7
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Cash: $ 1.05
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quote:
Originally posted by littleroc02us
quote:
Originally posted by Larry 7
quote:
Originally posted by littleroc02us
So here is what I don't understand, you have a paid for house, 35k in cc debt and you can't make the 1k payment each month or even extra. Do you have a job and if so how much do you make each month?
....well at the moment; $300 of that 1k payment is going to interest, I have NO desire to finance the CC's banks, although I would be paying interest on a HLOC or Mortgage, I don't think it would be at the current level....
So your really didn't answer my questions. How much do you make each month or one?
...currently I'm netting $225 a week 
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Wed Nov 16, 2011 2:54 pm |
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oldguy
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quote:
...currently I'm netting $225 a week
Well, you're earning only $11,000/yr and paying $3600/yr of it to bank interest - that can't work for very long. Plus a $35,000 high interest loan.
At this point you probably can't get a loan, your income is not enough to repay it - ie, a lender cannot approve a loan to someone who cannot make the payments. It may be necessary to sell the house, that is the only way to get access to that equity at this point. (It's too bad that you didn't free up some of that money a few years ago - but that's all hindsite.)
Do you have any job prospects? Do you have marketable skills that you will be able to apply to a high-paying job some day? What kind of work do you do?
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Wed Nov 16, 2011 3:24 pm |
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littleroc02us
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So IMO your problem is income, time to find more work.
Romans 13:8 “Owe no man any thing, but to love one another: for he that loveth another hath fulfilled the law.”
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Wed Nov 16, 2011 3:35 pm |
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Larry 7
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quote:
Originally posted by oldguy
quote:
...currently I'm netting $225 a week
Well, you're earning only $11,000/yr and paying $3600/yr of it to bank interest - that can't work for very long. Plus a $35,000 high interest loan.
At this point you probably can't get a loan, your income is not enough to repay it - ie, a lender cannot approve a loan to someone who cannot make the payments. It may be necessary to sell the house, that is the only way to get access to that equity at this point. (It's too bad that you didn't free up some of that money a few years ago - but that's all hindsite.)
Do you have any job prospects? Do you have marketable skills that you will be able to apply to a high-paying job some day? What kind of work do you do?
I applied for a loan (LOC), still waiting for an answer.....I told the interviewer, I'm paying MORE now than the payment on the loan would be every month... ....hopefully they'll take it into consideraration and the FACT my credit score IS between 745-800  ...
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Sun Nov 20, 2011 12:06 am |
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oldguy
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Are retired now?
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Sun Nov 20, 2011 3:02 am |
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Violette VGV
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Better to buy houses or such big purchases in one time and not taking life-long loans! And that is a pity that only a few of us are able to do this. But the fact that you are paying for a house and pay high interest rate for 30 yaers fringhtens me a lot. That is big money. While paying off the mortgage I had to take a few times installment loans just to pay for the interst rate in time.
To fulfill your short-term financial assistance same day cash loans will be helpful.
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Wed Dec 07, 2011 7:21 am |
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oldguy
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Cash: $ 309.30
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quote:
I applied for a loan (LOC), still waiting for an answer.....I told the interviewer, I'm paying MORE now than the payment on the loan would be every month... ....hopefully they'll take it into consideraration and the FACT my credit score IS between 745-800
The score is good but a lender can't lend money when there is no visible way to repay it. And a lender knows that $11,000/yr will be needed for subsistence,
Are you young with an inherited house? Or are you retired with a house that wa paid for during your working years?
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Wed Dec 07, 2011 3:14 pm |
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imperialloan
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I wouldn't advise borrowing on your home to pay off credit cards. Credit card debts are non-secured debts and you can discharge them through bankruptcy if you need to do that. Once you borrow against your house and you fail to make the payment you lost the house.
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Mon Dec 12, 2011 3:49 pm |
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