Posted on: 12th Oct, 2007 06:22 am
CAN ANY ONE OFFER ME SOME ADVICE ?
Hello,
I became disabled about 3years ago. I lost my business due to the disability and now my only source income is my Social Security Disability Check. I own my home, but have a Home Equity Loan and credit card debt. I‘ve been getting by and paying both with my S/S check and my savings account. I would like to consolidate my Equity Loan and my Credit card debt to lower my monthly payment ,to where I'm able to afford to pay for this with my Disability check alone.
Do to my situation of being disabled and not employed , I don't know who or were to go for help with this. I'm afraid to call my bank(Citibank) who is holding the note, thinking if they know of my situation, it might cause problems with my current loan. I don't know if going to another bank is the thing to do or just contact a mortgage broker.
My credit score is 730 and my wife's score is 768. We have never missed or been late on a payment and no bankruptcy. My house is worth $450000.00 and my Equity loan is $124000.00 and Credit Debt $55000.00. My credit score is due to the credit card debt, it was about 775 I never had that much credit debt and this is do to my disability. Also ,my current rate on the Credit debt is 2.99 and 3.99.I'd like to consolidate both and get another Equity loan/line in the range of $200000.00-$230000.00.
1.Will contacting my bank cause any problems?
2.Should I apply to another bank for a equity loan?
3.Will a bank not even consider my application with the
situation I describe here?
4.If I apply to another bank and get turned down , Will it effect my
credit report if I try a mortgage company to obtain a loan?
5.With the information I gave here, I'm I wasting my time? Will
I get a loan?
6.Are there any other options for me?
I'm at a stand still here and don't know what direction to go.......
I would appreciate any advice or info.........................
Thank you
Tom
Hello,
I became disabled about 3years ago. I lost my business due to the disability and now my only source income is my Social Security Disability Check. I own my home, but have a Home Equity Loan and credit card debt. I‘ve been getting by and paying both with my S/S check and my savings account. I would like to consolidate my Equity Loan and my Credit card debt to lower my monthly payment ,to where I'm able to afford to pay for this with my Disability check alone.
Do to my situation of being disabled and not employed , I don't know who or were to go for help with this. I'm afraid to call my bank(Citibank) who is holding the note, thinking if they know of my situation, it might cause problems with my current loan. I don't know if going to another bank is the thing to do or just contact a mortgage broker.
My credit score is 730 and my wife's score is 768. We have never missed or been late on a payment and no bankruptcy. My house is worth $450000.00 and my Equity loan is $124000.00 and Credit Debt $55000.00. My credit score is due to the credit card debt, it was about 775 I never had that much credit debt and this is do to my disability. Also ,my current rate on the Credit debt is 2.99 and 3.99.I'd like to consolidate both and get another Equity loan/line in the range of $200000.00-$230000.00.
1.Will contacting my bank cause any problems?
2.Should I apply to another bank for a equity loan?
3.Will a bank not even consider my application with the
situation I describe here?
4.If I apply to another bank and get turned down , Will it effect my
credit report if I try a mortgage company to obtain a loan?
5.With the information I gave here, I'm I wasting my time? Will
I get a loan?
6.Are there any other options for me?
I'm at a stand still here and don't know what direction to go.......
I would appreciate any advice or info.........................
Thank you
Tom
hi tf,
i find people like eric, tony and ckalvesmaki giving you some great advice here. :)
i don't know what's your age, but is there any chance that you qualify for supplemental social security because the social security is the only income that you have. regarding the credit card debt, you can approach debt consolidation companies for it – they can help you consolidate your debts. but they'll charge you a certain amount of fees and consolidation will also affect your credit.
however, if you need to get out of debts, you may have to consolidate them. now, if you wish to consolidate both the home equity loan and credit card debt, then go for a cash-out refinance of the equity loan such that the combined loan amount can help you pay for both the debts.
in order to cope up with the payments on the refinance loan, you may need extra income and that might be possible if you get an add-on benefit along with your social security and that's the reason i suggested that you may consider taking supplemental social security income along with the social security.
good luck and do ask us if you have further queries.
i find people like eric, tony and ckalvesmaki giving you some great advice here. :)
i don't know what's your age, but is there any chance that you qualify for supplemental social security because the social security is the only income that you have. regarding the credit card debt, you can approach debt consolidation companies for it – they can help you consolidate your debts. but they'll charge you a certain amount of fees and consolidation will also affect your credit.
however, if you need to get out of debts, you may have to consolidate them. now, if you wish to consolidate both the home equity loan and credit card debt, then go for a cash-out refinance of the equity loan such that the combined loan amount can help you pay for both the debts.
in order to cope up with the payments on the refinance loan, you may need extra income and that might be possible if you get an add-on benefit along with your social security and that's the reason i suggested that you may consider taking supplemental social security income along with the social security.
good luck and do ask us if you have further queries.
Thank you for the replies....................And thanks to this forum
"I find people like Eric, Tony and CKalvesmaki giving you some great advice here. "
They have definately made me feel much better about handling my situation. Before finding this forum, I was nervous and didn't know what to do.I really didn't think I would be able to consolidate.
Thanks to all of you...............
Caron,My age is 50.
I feel stupid ,What is a cash-out refinance?
I don't want to ruin my credit if possible, but I also hate to take unsecure debt and secure it with my home, but I don't know of any alternatives other then consolidating the two.
Thanks
Tom
PS. Tony , I'm looking forward to reviewing the material you mentioned, if you having a problem uploading it, please let me know. Thanks
"I find people like Eric, Tony and CKalvesmaki giving you some great advice here. "
They have definately made me feel much better about handling my situation. Before finding this forum, I was nervous and didn't know what to do.I really didn't think I would be able to consolidate.
Thanks to all of you...............
Caron,My age is 50.
I feel stupid ,What is a cash-out refinance?
I don't want to ruin my credit if possible, but I also hate to take unsecure debt and secure it with my home, but I don't know of any alternatives other then consolidating the two.
Thanks
Tom
PS. Tony , I'm looking forward to reviewing the material you mentioned, if you having a problem uploading it, please let me know. Thanks
Hello Tf,
A cash-out refinance of your home equity loan will help you to get a new loan higher in amount from the existing one, with which you can pay off the present loan and the excess may be used to clear a portion of your credit card debt, if not fully.This could be a no-ratio loan as your debt-to-income ratio is quite high.
For information on cash-out refinance, you may look here http://www.mortgagefit.com/discuss/cashout-option.html
You can also contact debt consolidation companies to manage your credit card debt.
Since your only source of earning is the social security check, you have to see if you can manage the new loan as well as the credit debt.
A cash-out refinance of your home equity loan will help you to get a new loan higher in amount from the existing one, with which you can pay off the present loan and the excess may be used to clear a portion of your credit card debt, if not fully.This could be a no-ratio loan as your debt-to-income ratio is quite high.
For information on cash-out refinance, you may look here http://www.mortgagefit.com/discuss/cashout-option.html
You can also contact debt consolidation companies to manage your credit card debt.
Since your only source of earning is the social security check, you have to see if you can manage the new loan as well as the credit debt.
Thanks for the reply!
"This could be a no-ratio loan as your debt-to-income ratio is quite high."
So, basically your trying to say, I will have a hard time or pay a higher interest rate because of my debt-to-income ratio. This is what I was afraid of to begin with but after hearing from Eric,Tony ,ckalvesmaki, I though with the information I provided I was okay. I don't want to destroy my credit if at all possible. Won't going to a debt consolidation effect my credit?
"Since your only source of earning is the social security check, you have to see if you can manage the new loan as well as the credit debt". Are you suggesting ,I not pay my credit debt with a secure loan from my home? I think because of my debt -to-income ratio that a bank will require me to pay them off, to be approved for the loan.Mybe I'm wrong there,I don't know.
Thank you
Tom
"This could be a no-ratio loan as your debt-to-income ratio is quite high."
So, basically your trying to say, I will have a hard time or pay a higher interest rate because of my debt-to-income ratio. This is what I was afraid of to begin with but after hearing from Eric,Tony ,ckalvesmaki, I though with the information I provided I was okay. I don't want to destroy my credit if at all possible. Won't going to a debt consolidation effect my credit?
"Since your only source of earning is the social security check, you have to see if you can manage the new loan as well as the credit debt". Are you suggesting ,I not pay my credit debt with a secure loan from my home? I think because of my debt -to-income ratio that a bank will require me to pay them off, to be approved for the loan.Mybe I'm wrong there,I don't know.
Thank you
Tom
hey this was an interesting read
its interesting to see people who are almost too good in our society :)
I wish you all the luck in your situation. People like you absolutly deserve a break.
Is your wife working?
Even though Eric mentioned above that a no Doc or low doc might be a red flag loan for you it might just work for you if you can get a decent rate. If you can show enough income then perhaps another loan is an option for you. If you get a total of 200k loan at 7-7.25% wich is what you should expect on a no doc loan with your qualifications. (No Ratio loan might work for you as well) you can expect a monthly principle and interest payment of under $1350/mon. This type of loan would involve closing costs but you would not be getting a variable rate likeyou will with HELOC and a 1st position home equity line would end up costing you almost just as much /mon on interest only and will be adjustable. Plus there is no guarantees that you will qualify for one. Remeber you can roll your closing costs into your loan. (just make sure they are reasonable)
its interesting to see people who are almost too good in our society :)
I wish you all the luck in your situation. People like you absolutly deserve a break.
Is your wife working?
Even though Eric mentioned above that a no Doc or low doc might be a red flag loan for you it might just work for you if you can get a decent rate. If you can show enough income then perhaps another loan is an option for you. If you get a total of 200k loan at 7-7.25% wich is what you should expect on a no doc loan with your qualifications. (No Ratio loan might work for you as well) you can expect a monthly principle and interest payment of under $1350/mon. This type of loan would involve closing costs but you would not be getting a variable rate likeyou will with HELOC and a 1st position home equity line would end up costing you almost just as much /mon on interest only and will be adjustable. Plus there is no guarantees that you will qualify for one. Remeber you can roll your closing costs into your loan. (just make sure they are reasonable)
I think Eugene have raised a good point - does your wife earn? It is important because then you will be able to afford more than you can pay now on a refinance loan.
A cash-out refinance is taking out a mortgage loan higher than the unpaid balance of the existing loan on the home. In order to do a cash-out refinance, it's best that you choose a no-ratio loan. This is because lenders offering such a loan will not consider your debt-to-income ratio. Rather they'll consider whether you have a good credit score or not.
If your score is good enough to qualify for such a loan and you satisfy other criteria, then you won't have to pay higher rate of interest.
"
but I also hate to take unsecure debt and secure it with my home"
I didn't get what you're trying to say here. Can you please explain again.
Regarding debt consolidation affecting your credit, well that's going to happen but you don't have a way out here, do you? If the cash-out refinance isn't enough to consolidate both your debts, then debt consolidation is one way by which you can at least get rid of your credit card debt gradually.
Good luck and if you have further queries, please feel free to ask.
A cash-out refinance is taking out a mortgage loan higher than the unpaid balance of the existing loan on the home. In order to do a cash-out refinance, it's best that you choose a no-ratio loan. This is because lenders offering such a loan will not consider your debt-to-income ratio. Rather they'll consider whether you have a good credit score or not.
If your score is good enough to qualify for such a loan and you satisfy other criteria, then you won't have to pay higher rate of interest.
"
but I also hate to take unsecure debt and secure it with my home"
I didn't get what you're trying to say here. Can you please explain again.
Regarding debt consolidation affecting your credit, well that's going to happen but you don't have a way out here, do you? If the cash-out refinance isn't enough to consolidate both your debts, then debt consolidation is one way by which you can at least get rid of your credit card debt gradually.
Good luck and if you have further queries, please feel free to ask.
He meant he doesnt want to payoff his credit cards with the equity of his home :)
Thanks Eugene,Caron and Jenkin7 for the replies!
"Quote:
"but I also hate to take unsecure debt and secure it with my home "
I didn't get what you're trying to say here. Can you please explain again.
Regarding debt consolidation affecting your credit, well that's going to happen but you don't have a way out here, do you? If the cash-out refinance isn't enough to consolidate both your debts, then debt consolidation is one way by which you can at least get rid of your credit card debt gradually. "
I was trying to say, I didn't want to go to a Debt Consolidation Company that would effect my credit, if I could avoid it. Now Caron ,you said debt consolidation is going to effect my credit. I know going to one of these Credit card Debt consolidation companies that cut your credit card debt in half and in the process will ruin my credit. How would consolidating both my Equity Loan and CC debt in to one loan effect my credit?
To All:
Because of my debt-to-income ratio the only loan that could possibly qualify for is a no-ratio loan? and I'll be lucky if I get a loan that will be enough to pay of both my Equity loan and Credit card debt? Is that right? This is eactly what I was afraid of when I first posted on the forum. But with the information I provided and earlier replies I received, I was told that I would be able to get a loan.
Okay ,so I'm a little confused now! :?
I'll call Citibank ,but I'm sure they don't have a no-ration loan
Should I contact a local broker for help?
Should I apply to several company's at one once?
What should I do here?
Thanks
Tom
"Quote:
"but I also hate to take unsecure debt and secure it with my home "
I didn't get what you're trying to say here. Can you please explain again.
Regarding debt consolidation affecting your credit, well that's going to happen but you don't have a way out here, do you? If the cash-out refinance isn't enough to consolidate both your debts, then debt consolidation is one way by which you can at least get rid of your credit card debt gradually. "
I was trying to say, I didn't want to go to a Debt Consolidation Company that would effect my credit, if I could avoid it. Now Caron ,you said debt consolidation is going to effect my credit. I know going to one of these Credit card Debt consolidation companies that cut your credit card debt in half and in the process will ruin my credit. How would consolidating both my Equity Loan and CC debt in to one loan effect my credit?
To All:
Because of my debt-to-income ratio the only loan that could possibly qualify for is a no-ratio loan? and I'll be lucky if I get a loan that will be enough to pay of both my Equity loan and Credit card debt? Is that right? This is eactly what I was afraid of when I first posted on the forum. But with the information I provided and earlier replies I received, I was told that I would be able to get a loan.
Okay ,so I'm a little confused now! :?
I'll call Citibank ,but I'm sure they don't have a no-ration loan
Should I contact a local broker for help?
Should I apply to several company's at one once?
What should I do here?
Thanks
Tom
"He meant he doesnt want to payoff his credit cards with the equity of his home " Thanks Eugene!
That's exactly what I meant but I know ,I have no other choice .
That's exactly what I meant but I know ,I have no other choice .
I want to clarify that no doc loans can be risky but as Eugene said not all of them are bad. You just need to read the documents carefully. If you can get a good rate on a good program then no doc is a good option.
You asked how a debt consolidation could effect your credit. If you get a new mortgage it won't affect it very much. If you consolidate it depends on how you do it. If you do something like "Consumer Credit Counseling" sometimes lenders will look at it negatively if you ever do try to refinance your mortgage.
Here is what I think is the best way to go. Get a first mortgage instead of an equity line. You can consolidate everything into 1 30 year mortgage. That way the payment should be low enough to let you have some extra every month. You could probably even take out a little extra cash to save to the side. A fixed rate first mortgage should be around 7 to 8% interest. Would have to run the numbers though to see if that would save or not. I will run them shortly and post back.
You asked how a debt consolidation could effect your credit. If you get a new mortgage it won't affect it very much. If you consolidate it depends on how you do it. If you do something like "Consumer Credit Counseling" sometimes lenders will look at it negatively if you ever do try to refinance your mortgage.
Here is what I think is the best way to go. Get a first mortgage instead of an equity line. You can consolidate everything into 1 30 year mortgage. That way the payment should be low enough to let you have some extra every month. You could probably even take out a little extra cash to save to the side. A fixed rate first mortgage should be around 7 to 8% interest. Would have to run the numbers though to see if that would save or not. I will run them shortly and post back.
Ok here is what we have.
Payoff current equity loan of $ 124,000
Payoff current CC's debt of $ 55,000
Roll in the cost of new mortgage $ 6,000
You get a check for cash of $ 15,000
Total loan of $200,000
Your new total payment would be $ 1330 plus taxes and insurance for 30 years @ 7% interest.
Payoff current equity loan of $ 124,000
Payoff current CC's debt of $ 55,000
Roll in the cost of new mortgage $ 6,000
You get a check for cash of $ 15,000
Total loan of $200,000
Your new total payment would be $ 1330 plus taxes and insurance for 30 years @ 7% interest.
Eric Thanks, I really appreciate the help!
I contacted Citibank today and explained to them, my situation. They said, the only thing I could do and the best thing to do with using them, is to apply for a new Equity Loan(Line) to pay off everything. Citibank suggested a $210000.00 line.They said this way I could consolidate and have some extra for an emergency, like you suggested Eric.So, they took my information and said they'd call back. They called back in one hour and asked, if I could get my Kids or somebody to co-sign. I'm embarrassing enough but, my kids don't know and I don't want to tell them. Anyway, it's the debt to ratio problem. They said that they would come back with a counter offer in 24-48 hours.
"If you do something like "Consumer Credit Counseling" sometimes lenders will look at it negatively if you ever do try to refinance your mortgage. "
I don't want to go that route
So, I guess I'll start calling lenders. How's Quicken ,E-loan or Counrtywide?
or would it be best to get a broker ,as suggested earlier?
Thanks again for the HELP!
Tom
I contacted Citibank today and explained to them, my situation. They said, the only thing I could do and the best thing to do with using them, is to apply for a new Equity Loan(Line) to pay off everything. Citibank suggested a $210000.00 line.They said this way I could consolidate and have some extra for an emergency, like you suggested Eric.So, they took my information and said they'd call back. They called back in one hour and asked, if I could get my Kids or somebody to co-sign. I'm embarrassing enough but, my kids don't know and I don't want to tell them. Anyway, it's the debt to ratio problem. They said that they would come back with a counter offer in 24-48 hours.
"If you do something like "Consumer Credit Counseling" sometimes lenders will look at it negatively if you ever do try to refinance your mortgage. "
I don't want to go that route
So, I guess I'll start calling lenders. How's Quicken ,E-loan or Counrtywide?
or would it be best to get a broker ,as suggested earlier?
Thanks again for the HELP!
Tom
Thanks Eric, for those Numbers. I saw your post right after I posted mine.
I recommend a broker. Where do you live? You can contact me through the website link in my signature. If I cannot help you in your state I will know someone that can. There are also lenders available through this site if you click mortgage quote in the navigation at the top of the site.
I also just saw the reply that the CC rates are not introductory. I would have some additional questions for you as I don't know if you would want to refi them. It may be your heloc that is costing so much.
Do you have a first mortgage or just the heloc?
I also just saw the reply that the CC rates are not introductory. I would have some additional questions for you as I don't know if you would want to refi them. It may be your heloc that is costing so much.
Do you have a first mortgage or just the heloc?