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cchapman1967 · Jul 10, 2008, 07:05 AM

Question:

My husband has mid fico score of 636 and I have 666. 10 months ago We bought a house for 106k which is valued online @ 141k. It was a foreclosure, and needed a lot of work---well we did the work and it is almost perfect. We came into the mortgage with some other debt and now with all the additional work we owe approx 63,500 in other debt--2 cars, lines of credit and credit cards----we would like to get a handle on this debt. When we ask for a home equity line they say there is no market for it and want us to refinance the home. OK...
they are stating they will give us 95% of value and after fees this will give us 24500 to go on debts. One place stated that we would only have to pay 2800 is closing costs and fees. Another place stated that it would be closer to 4800. Another place stated that it would be better to wait until the mortgage has one solid year of payments. I am confused and not sure who to trust. Help please... we have to do something because we are having trouble paying anything over minimum... our income is around 57000.

thank you

ScottGem · Jul 10, 2008, 07:35 AM

What is your mortgage now?

jakester · Jul 15, 2008, 08:06 AM

Originally Posted by cchapman1967

Question:

My husband has mid fico score of 636 and I have 666. 10 months ago We bought a house for 106k which is valued online @ 141k. It was a forclosure, and needed a lot of work---well we did the work and it is almost perfect. We came into the mortgage with some other debt and now with all the additional work we owe approx 63,500 in other debt--2 cars, lines of credit and credit cards----we would like to get a handle on this debt. When we ask for a home equity line they say there is no market for it and want us to refinance the home. OK...
they are stating they will give us 95% of value and after fees this will give us 24500 to go on debts. One place stated that we would only have to pay 2800 is closing costs and fees. another place stated that it would be closer to 4800. Another place stated that it would be better to wait untill the mortgage has one solid year of payments. I am confused and not sure who to trust. Help please.....we have to do something because we are having trouble paying anything over minimum.....our income is around 57000.

thank you

hey - what I'd suggest is that you sit down with your husband and go through the different debt accounts you have (credit cards, lines of credit, and mortage) and figure out what your interest rates are for each account and what your EXACT balances are. Then add up what your monthly payment obligations are for each. Once you do that, you'll be able to determine what your PITI ratio is (Principal, Interest, Tax, Insurance).

For someone with a combined household income of $57,000, you don't want to be paying more than 35% of your monthly income towards debt. That would be about $1,662 per month. If you are paying out more than that each month, then trying to consolidate some of the higher interest rate accounts is your best bet.

If I'm going to be completely honest with you, you might need to make some lifestyle changes if you can't afford your current payments (i.e. go out to eat with hubbie only 1x a week or put off buying that new shirt until next month). You'd be surprised at what you can afford when you start keeping track of how you are spending your money.

It will take a serious commitment from you and your husband to sit down and budget and really become more intimate with the numbers... but with both of you together, you can accomplish so much more (Two are better than one, because they have a good reward for their toil. For if they fall, one will lift his fellow. But woe to him who is alone when he falls and has not another to lift him up!)