I have about $9,000 in credit card debt (reduced from $16,000 just a year ago). I%26#039;m buying a house for the first time, is there some way to get $9,000 back from my lender to pay off that debt so I only have the mortgage payment every month? This would knock out the out of control interest rates on the credit cards and save us money in the long term. I%26#039;m getting a 15yr note.
Roll credit card debt into first-time home-buyer mortgage?
When you buy a house, your mortgage is secured (guaranteed) by collateral aka the house. Your lender won閳ユ獩 give you money for anything other than the collateral. If you are making a down payment and/or you have built in equity (buying below appraised value), you have the potential to refinance your mortgage or take out a home equity line of credit (HELOC), but I highly discourage you from doing either.
The issue with taking equity out of your home is that you are removing the cushion that can save you in times like these. I閳ユ獟l use a real world example of someone I know: purchased home in 1998 for $92K. Refinanced and took out a HELOC making total owed on house $160K by 2005 (at that point they had virtually no equity). In 2006, ran into trouble keep up with mortgage payments. Tried to sell home for $145K, bank refused. Lost home to foreclosure. If those same people had left their original mortgage alone, and still tried to sell in 2006, they would have made $53K before commissions. Instead, their credit is destroyed and they lost the place they called home for nine years.
This article does a good job of summing it up: http://mortgages.weblogsinc.com/2006/07/...
Roll credit card debt into first-time home-buyer mortgage?
Look into %26quot;Partners in Charity%26quot; But Beware, all lenders do not work with this group.
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