Need opinions/suggestions regarding refinancing our home

Another comment I wanted to make to the OP is in regards to her comment about home equity.

Don't base that equity figure on today's market unless you plan to sell. When the market turns back down the value of your home will likely decrease. The other thing I always preach about home equity is this...yes on paper let's say you have $40k in equity, but to get to that $40k you may have paid close to $100k in interest. Mortgages are very interest heavy at the beginning, create an immorazation table and you can see what that equity has cost you.

I admit the home mortgage trip is something most of us have to go thru. My point is home equity is precious and hard earned, it should never be taken for granted but should be protected. That's my opinion anyway.
 

Credit card debt is a nemesis for a good lot of us

I slid into it when we used it to get help for our schizophrenic son.
$40K worth
Never missed a payment, but not paying it down
Knuckled down
Got on a plan
Took 5 years to get it all paid off
Not fun, but gratifying to get out from that load

The banks 'worked with me', easing the rate

Only took a couple years for our credit rating to rise to better than the average
 
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palides2021 said:
This is so true! I did an estimate once to see how much money I would need just to maintain the home for the next 20 years, and it went to around 100,000! So saving money for these maintenance costs is paramount.
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Absolutely!

Retirement isn’t a destination, it’s just one of life’s milestones.

Saving for future needs and wants should be the first item in every monthly budget.
 

Gary O' said:
Credit card debt is a nemesis for a good lot of us

I slid into it when we used it to get help for our schizophrenic son.
$40K worth
Never missed a payment, but not paying it down
Knuckled down
Got on a plan
Took 5 years to get it all paid off
Not fun, but gratifying to get out from that load

The banks 'worked with me', easing the rate

Only took a couple years for our credit rating to rise to better than the average
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That kind of credit card debt is understandable, it also brings up a good point.

When people with maxed out credit cards and no savings have an emergency what can they do? Not much. That's another reason to never carry credit card debt, some day it may be your only option for emergency expenses.

Gary O' I hope your son is better, I have gone thru issues with my son and know how heartbreaking it is when we can't fix them. Best wishes to your family.
 
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Your husband has a problem with self control and self discipline. Credit cards need to be paid off ASAP. Then you need to open his wallet while he is sleeping and use your scissors to cut all his credit card up into little tiny pieces. Your husband reminds me of a little kid in the local candy store. He can't help himself. All the advice about credit counselor hits the solution to the problem right on the nose.
 
C50 said:
The problem with that is, sure, the home equity loan is probably a lower interest but they would just be transferring debt. Not to mention taking 15 years to pay off that additional debt, and eating up some of their home equity, and opening up their credit cards for more spending. Oh and probably borrowing more than is actually needed because they can!

Can you tell I don't like that approach? Its a bandaid fix that doesn't heal the problem. They need to learn financial discipline and develope financial intelligence.

OP do some research on financial councelling in your area, you may be able to get free help thru a local senior center. Being financially prudent is critical toward living a comfortable life, living debt free is one of the greatest gifts you can give yourself.
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I disagree. The op states they have credit card debt that they wish to pay off. More than likely, they are paying minimally at least 9.9%+ interest. The banker will assess the equity of the home and tell them what they may borrow. If they are going to borrow money to pay off the cards, this is what most FA’s will recommend. If a person owes $15,000, they borrow $15,000 at around 6% interest.

What you’re suggesting doesn’t pay off the credit cards, so they will continue to make payments at a higher rate. They can get all the counseling in the world, but at the end of the day, they still have the credit card debt at most likely at around 12% interest or more. I have seen rates as high as 27.9%. If they owe $15,000, they should only take $15,000 @6% and pay it down in the least amount of time as possible. You don’t have to go the whole 15 years.

Let them decide what’s best for their situation.
 
Moon Rat said:
I disagree. The op states they have credit card debt that they wish to pay off. More than likely, they are paying minimally at least 9.9%+ interest. The banker will assess the equity of the home and tell them what they may borrow. If they are going to borrow money to pay off the cards, this is what most FA’s will recommend. If a person owes $15,000, they borrow $15,000 at around 6% interest.

What you’re suggesting doesn’t pay off the credit cards, so they will continue to make payments at a higher rate. They can get all the counseling in the world, but at the end of the day, they still have the credit card debt at most likely at around 12% interest or more. I have seen rates as high as 27.9%. If they owe $15,000, they should only take $15,000 @6% and pay it down in the least amount of time as possible. You don’t have to go the whole 15 years.

Let them decide what’s best for their situation.
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I agree with the philosophy of your post 100%, and hope that they would only borrow what is needed to pay off the cards. A home equity loan is cheap money to use verses carrying credit card debt.

My concern is people who lack financial discipline end up doubleling up on their debt by doing that. That $400 min. CC payment becomes $100 monthly on the equity credit, and suddenly the debt isn't such a worry. Then once again the cards are available to recklessly spend with, they get maxed out and then more debt is transferred over to the equity credit...repeat and repeat. Before they realize it there is no home equity.

Whatever they do husband and wife need to get on the same page and create a disciplined plan.
 
bowmore said:
This may sound harsh, but the first thing you need to do is to get to a credit counselor. It seems you and your husband are not on the same page as far as spending.
The typical scenario is that you refinance, pay off all your cards , then one or both of you runs up credit card bills again, leaving you further in the hole.
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Not harsh at all...him and I are definitely not on the same page. You are on point and this is why I declined to refinance. I have no doubt I will pay off my credit cards. A credit counselor sounds ideal, however, I don't think that would solve my husband spending habits. I am aware of where most of my debt came from and aware of how to get out of debt. I will work on the smallest balance and then tackle the higher one. It will not take me too long... I'm on a mission..🤣🤣 Thank you for responding - much appreciated.
 
oldaunt said:
I had a husband who was not good with money, and a paid off home. He insisted on refinancing to pay off things, and I lost my home. There was always something he "needed".
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WOW!!!! Reading this, I will stick to my gut and not refinance with him. He sounds a little like my husband. After my vehicle is paid off which is less than a year, he wants to get a truck. He already know my name will not go anywhere near being a co-signer...been down that road before. I mention to him that it does not make since to put debt on top of debt. I can see if his credit cards were paid off and he could pay the balance off each time he use it...that is not the case.
 
Ladybj said:
My hubby and I have been in our home for about 3 years. Due to the market, we have quite a bit of equity. We plan on keeping our home for the long haul. We both want to pay down credit card debt..
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Never never never use real property equity to pay off credit card debt, makes no sense. Start a structured plan to put an amount into savings every month. Shop for deals on credit rates and maybe consolidate card balances at a lower rate. Restrain any impulse to add to your already existing CC balances.
 
John cycling said:
He doesn't need a credit card and he shouldn't have one.
Have a discussion with him, and take over all of the credit card spending.
This is a very important issue, and you both need to agree to make sure it will work.
Do not refinance the home, as that would be enabling his habit and his habit would get worse.

___ Make a budget from your last few statements separating necessities from things you don't need;
___ Eliminate all spending for things you don't need, and apply it to paying down the credit card debt;

___ Make a list off all credit cards showing name, limit, balance, and interest rate;
___ Negotiate with each card to see if they'll give you a lower interest rate to help pay it off;
___ Freeze any credit cards that you don't use for necessities. Implement ways to live more frugally;

___ Pay off cards with the highest interest rates first, or transfer the amounts to lower interest rate cards;
___ If you can find 0% interest 1 year card offers (for example), transfer the highest balances to those cards;
___ If all the cards have the same rates, pay off the lowest balances first. Cancel any cards that have annual fees.

Do not sign up for a debt consolidation plan, because that would destroy all your credit.
Do any and all negotiations yourselves, not through an outside agency.

@Jules, because they stop all payments, while negotiating with the companies.
People can negotiate themselves without doing that, so the overall results are much better.
Plus the key is with the people in debt regaining and being in control, not the credit card companies.
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GREAT advice John. You are 100% correct, my husband DO NOT need a credit card. I have been down the road of making sure monthly bills were paid - when he got paid, it went directly into my account and I gave him an allowance. I don't want that responsibility anymore...it was a nightmare. When we separated for (3) years he had an apartment and handled his bills. Once we got back together, we kept things as they were..he has his account and I have mine. He takes care of his personal monthly bills..cell phone, car insurance, etc., he also put money in my account to take care of the mortgage, etc. I can say, he does pretty good for the most part in taking care of his share of monthly expenses. I have learned a lot several years back.. I will not sign up for a debt consolidation plan - you are right, I can do that myself..which I have done years ago.
 
Aunt Bea said:
I wouldn't trade short term credit card debt for long term mortgage debt.

Analyze your spending to get an idea of where the money is going, put yourselves on a monthly cash allowance, and pay as much as possible on the credit cards each month until they are paid off.

Good luck!

“When you find yourself in a hole, quit digging.” - Will Rogers
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Thanks Aunt Bea.. I have done that. My cc spending is on grocery. A lot of times, I use my cc to buy grocery and tell myself I will pay it off on pay day..but that is not the case. However, I am getting better. My husband handles his own ccs.
 
rgp said:
In a nutshell ..... I agree with all the "don't do it" comments already posted.

And indeed .... kunckle under and pay down/off, those credit-cards another way. And do not run them up again ... ever.
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Thank you... I hear you LOUD and CLEAR (y):D Now my hubby, that's a whole different chapter...lol
 
Blessed said:
No refi...The focus is to get the cards paid off asap. Then just have one for emergencies. If he has a problem with credit cards and admits it, he should not have a problem with letting you be in charge of the card. If he is taking out cards that you don't know about he could take you to financial ruin.

I have a friend that is 60M in credit card debt. Another friend died, never married, no children. He left his estate to my son. Another friend said what about so and so, he is 60M in debt? I said "Whose fault is that?" If you are going to be financially irresponsible don't expect someone else to take care of it.

Sounds like time to bring the hammer down. You have to protect yourself and your assets. If it all goes to hell in a hand basket, you will be right there in the basket with him.
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Thank you for the eye opener. Much appreciated.
 
Moon Rat said:
Right now home equity loan rates are around 6%, some places less. If your credit cards are considerably higher rate, taking out a 15 year home equity loan may be the way to go. Pay off asap.
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Thank you for the advice... not sure if I would go that route due to the fact that it will enable my husband to get back in debt.
 
C50 said:
The OP admits to carrying her own credit card debt so I think this is a dual issue.

ANY and ALL credit card debt is a financial anchor on your life. I'm not going to write 1000 words explaining this, all I'm going to say is both of you need to get smarter and not spend what you don't have......and no, don't refinance.
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I agree, it is a dual issue.. not making any excuses however, one of my cc balance is high due to a medical bill and I spend waayyy too much on grocery.
 
Colleen said:
Get a financial advisor to look at what you have in debt and see what he/she suggests. It sounds like you both have a CC problem. You need someone to set you on a budget to pay off CC first. Going into more debt and risking losing your house is never a good idea. My husband is terrible with money so I've always been the one to keep everything paid. He doesn't buy "things" but he has no concept of how much money is actually in the bank or what I do. You need to get a grip on him and yourself to stop spending what you don't have.
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You are right to a certain degree. Part of my cc debt was due to a medical expense. I admit I spend waayyyy too much on grocery...which being aware is helping me. I have no doubt, I will pay off my cc and keep them at a low balance that I can pay off each month. Thank you.
 
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