“Dear Steve,
Lost my job in 2008 in the building industry. Did not find a job till 2011. I used my 401k to pay bills down to where I could make minimum payments on credit cards & keep the house running on unemployment payments. The unemployment benefits ran out and so did my luck as far as keeping up with the bills.
My wife & I never missed or had a late payment on our house. We also have 700.00 a month college loan payments not to mention credit card bills. We are blessed to have good jobs now & we are thinking about trying to refinance our home. Our house is currently worth 168,000.00 tax value We owe 51,000.00 & we would like to refinance an amount of 105,000.00 to pay off credit cards and back taxes. My credit score is 620.
What reputable financial institutions do you recomend that we might try to refinance our home or any other good advice.
Chuck”
Dear Chuck,
Your best bet is to work with a local mortgage broker that represents a number of lenders. They will have a broader toolbox full of programs to meet different situations.
It’s too bad you didn’t find me before you raided the 401k. I would have loved to have helped you save that.
One thing to consider is if selling the house, paying off your debt, and reestablishing your credit again might be a smart move. You could then buy a new home once your credit has rebounded.
If you live in a state where your home is protected from bankruptcy you might want to consider that. Bankruptcy can even discharge taxes older than three years and give you a legal fresh start and second chance.
Please post your responses and follow-up messages to me on this in the comments section below.
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