Two years ago we refinanced our house to pay off some debt and get rid of our ARM loan, but we were stupid and now are in the same position with credit card debt. Would it be smart to refinance to try to get a lower payment? I keep getting things in the mail saying “You can lower your mortgage payment to $900!!” etc. Are they all scams? Our payment right now is $1350 and after other bills we barely have enough for food and gas. Our mortgage company has already deferred one month’s payment because my husband was laid off, so I don’t think they would be helpful in modifying our loan or anything. I’ve already talked to the credit card companies and they have lowered our rates and payments by temporarily closing the cards. The only other thing I can think of is to refinance and try to get a lower payment. What are your thoughts?
You are not the first person to wind up back in this situation, and you won’t be the last. When I warn people about this possible outcome from consolidating and refinancing debt they always assure me they won’t get back in debt again. But as you know, they can and do.
No worries, let’s tackle the situation and get you a game plan so you can recover your life.
I had the following questions that I’d like for you to answer before I can answer your question. Please post your answers in the comments section of your question. I’m looking forward to helping you for free.
- What type of mortgage do you have now? Is it a fixed rate mortgage, what is the interest rate and for how many years?
- How much new debt do you have?
- How much is your home worth and how much is the current mortgage for?
- Do you plan to stay in your current home or sell in the next few years?
As soon as you can post the answers to my questions above I’ll be able to help.
If any reader wants to offer advice in the comments section please feel free to participate.