HIGH INTEREST CARDS ARE EATING ME ALIVE!!
Question: Home equity: $25k equity on a $150k house. (not enough for a home > equity loan.) > I think my interest rate on this mortgage is 10.5%
My best thought fo you, if your mortgage rate is indeed 10.5%, is to >REFINANCE ASAP. Get a lower rate. You can probably get something around >7.25% with no closing costs. This will likely lower your payments enough >that you can take the money you will save every month and apply them to the >credit card bills to accelerate your payments.
Answer: I’m doubtful anyone would refinance this first mortgage loan for a lower interest rate now since 1) he/she doesn’t have 20% equity, and 2) his/her financial situation is now a nightmare.
Probably his/her best bet is to try to get a second mortgage loan with one of those ripoff “borrow up to 125% of the equity of the home, NO CREDIT, BAD CREDIT OK” agencies that send brochures to (mostly) poor and disadvantaged neighborhoods. I’m sure they would charge some outrageous rate – BUT REPAYMENT WOULD BE IN PRE-TAX DOLLARS.
This person’s financial situation is so bad that, for example, a ripoff rate like 14% on a second for $43K, would make payments equivalent to maybe a 10% after-tax credit card rate. Would effectively cut the monthly payments on the $43K in half.
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Filed under: Home Equity Loan
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