We have around $70,000 in credit card debt. My husband is self employed, and as the work has slowed, we’ve turned to credit cards more and more, you know how it goes.
Five years ago, we bought our house with a sub-prime mortgage, $40,000 down and a “liars loan” basically. It was a five year interest only loan, and we have to refinance in the next month or two.
We haven’t missed a mortgage payment, a car payment, but a couple of credit payments, always due to carelessness.
We don’t know how or where to look for refinancing. I’m afraid.
We have to refinance our home due to the type of mortgage we took out, but with serious credit card debt, what can we do?
I don’t want to paint a rosy picture for you here. There might be some unfortunate times ahead.
If you are living off credit cards, have some late payments, and an interest only mortgage you might need to face the difficulty that you will not be able to afford a regular amortized mortgage even if you could qualify for one.
Basically, as you rely more and more on the credit cards and the balances go up, your credit score goes down. The balances carried become a greater percentage of available credit and as your balances climb over 50% of the combined limits your credit score will suffer.
A not very attractive credit score, combined with restricted cash flow is going to leave you lucky to get financing at all in this environment. You see, your interest only loan payments are going to be much lower than the payments on a regular mortgage.
Your best bet for any sort of financing is going to be a local licensed mortgage broker that represents a number of lending sources. Check the web or your local telephone book for a local mortgage broker. Do it now.
Please update me on your progress by posting updates here in the comments section of your question. I’m very interested in how this works out for you.