Need opinions/suggestions regarding refinancing our home

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Ladybj

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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.. his debt is higher than mine. He ask me about refinancing. I first said no..but I thought about it again. However, he is not good with money at all.

I do not want to refinance and find ourselves back into financial credit card debt again. I have two credit cards, he has two (as far as I know) as well. Well, I have 3 but only use two - one is a department store cc which I rarely use. If I use it, I pay if off before I get the bill. We also have a very good interest rate on our house. With his spending habits... I am leaning towards not refinancing?? Thanking all in advance that has taken the time to respond.
 

Interest rates are rising, and this is not a good time to refinance. It will probably mean a higher mortgage for you. A few years ago, when the interest rates were low, that would have been a good time to refinance. We did that with my husband one year. We refinanced at lower interest rates and paid a lower mortgage as a result. Edited - I wanted to add that because we refinanced, we were able to pay our loan quicker because the mortgage was lower. We also only had one credit card that we used and paid off right away.
 

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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.
 
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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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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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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My husband refinanced our home and ended up refinancing most of it's value. He bought it for $225K, and he refinanced it at $475K. I wasn't on the title because he bought everything solely in his name. We lost the house to foreclosure.
 
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.
 
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.
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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.
 
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 totally, carrying credit debt is just like setting money on fire. I do use a credit card, use it for everything, but is paid in full every month. I also get cash back rewards. It also makes it easier to balance, and it there is a service or product problem I can dispute it until it is resolved.
 
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.
 
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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I was always the one to be in control of the finances. Made sure everything paid and up to date. The saver, the clearance girl, the home cook....the house is paid off, the son went to college with no need for student loans. I am comfortable in retirement but still carry on in my frugal ways.
 
You have to get rid of the credit card debt. And that doesn't mean you transfer that debt to a loan vehicle, which could lead to losing your home. You've had your home for only three years, and you intend it to be your forever home. That house is never going to be "paid off", it's going to need new appliances, or a roof, windows, etc., etc. If you're just above water with credit card debt, you're going to be swamped.
 
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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60M?... 60 million ?.. that's not possible on a credit card debt surely... what does the M mean ?
 
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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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.
 
bowmore said:
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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Financial advisors agree with this and it seems almost all of do.

John cycling said:
Do any and all negotiations yourselves, not through an outside agency.
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Why yourself? Wouldn’t they have stronger negotiating knowledge. I have no idea what they charge; for some reason I thought they didn’t.
 
fuzzybuddy said:
You have to get rid of the credit card debt. And that doesn't mean you transfer that debt to a loan vehicle, which could lead to losing your home. You've had your home for only three years, and you intend it to be your forever home. That house is never going to be "paid off", it's going to need new appliances, or a roof, windows, etc., etc. If you're just above water with credit card debt, you're going to be swamped.
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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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