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How Can We Find Someone to Refinance Our Home? – Kathy

“Dear Steve,

We are in credit card debt of an incredible $40,000. We are trying to refinance our home…We owe $110,000 on it, but its assessed at $265,000. We are wanting to refinance to pay off the cc debt. The problem is, we can’t get refinanced because of our debt level and some late payments.
I called a few credit cards to lower our payments / interest rates but they say our expenses exceed our income (duh) and they refer us to their mortgage people who then tell us we can’t help you because we have some late payments and too much debt. Its a vicious cycle. We can barely make our minimums because of all the changes, etc. What should we do?

What is the first step to getting our monthly payments down, how can we find someone to refinance our home…

Kathy”

Dear Kathy,

It is a vicious cycle. At this time lenders are being very particular about who to lend to.

If you have your heart set on a refi then the best bet would be to check with a mortgage broker that represents a number of different lending sources. This way they can match you up with a lender that might consider you. However, there is no guarantee of success with that route.

If your credit score is 660 or higher then you might want to try an alternative approach. What is you looked into a fixed rate unsecured debt consolidation loan from LendingClub.com and took the $25,000 highest interest ate debt and paid that off with the LendingClub.com loan. It may give you the breathing room you need for now, give you more time to make on-time payments and the LendingClub.com loan will be reported to the credit bureaus which can further increase your credit with more on-time payments?

If you do decide to go the LendingClub.com route, LendingClub is a peer-to-peer lending network and if you let me know I’d be happy to be one of the lenders that invests in your loan.




About the author

Steve Rhode

Steve Rhode is the Get Out of Debt Guy and has been helping good people with bad debt problems since 1994. You can learn more about Steve, here.

3 Comments

  • Very nice advice steve, I would like to add a few comments.

    First step is make sure you have a accurate budget, when you do this in writing you tend to find places you can reduce in order to tackle your debt harder.

    There is not a magical fix to reducing your minimums, but you can take a systematic approach that will help.

    First call your credit card companies back again and do not take no from the first person, ask for a manager.

    First thing is to tell them you have several ballance transfer offers but before you start transfering balances you want to see what they can do for you as you would like to keep your money in one place.
    IF that doesnt work ask them this question exactly as I type it ” Do you have any product exchanges or upgrades to anything like a rewards card” . If they do verify what your default rate will be on that card most likely 12 – 14% which is probably considerably lower then you are currently. This will help you as you will pay less interest therefore applying more principal.

    Now you need to work very hard at not missing payments or you will have your rates hiked again. It is certainly a tough process but if you make debt payments a priority things will get easier sooner then later.

    Good luck in your search and hope you have success.

  • Thanks, I am not sure my credit score is 660 unfortunately. What is the process to start the Lending loan you referred to? Thanks for the help.

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