Debt consolidation with mortgage?

Deal Score0

We have a mortgage for 146,000. Value according to mortage holders is around 205,000. We have a fixed 6.65% rate and have 26 yrs left on mortgage. Current holder could roll all of our debt into home loan and reduce our rate by .25%. Bringing our payment with escrow, insurance, taxes, etc.. from 1460.00 to 1750. Our debt includes 14,000 in student loans, 14000 in credit cards, 15,000 in vechiles as well as 10,000 on HELOC. The question is this almost taps out the entire equity in our home and we would also have a thirty year loan again. Would this be a wise move? Thanks. BTW both of our middle credit scores are mid 720. We make about 110,000 a year.

  1. Reply
    Ask M
    February 4, 2011 at 2:11 am


  2. Reply
    February 4, 2011 at 3:00 am

    This is not a good option. Do you realize how much money in interest you will pay if you extend all these other debts along with your house to 30 years?

    And c’mon now, you only have about 55,000 in debt other than your house and you make 110K a year. That should be at least 80K a year after taxes. You need to cut your lifestyle and live on 40-50K a year for less than 2 years and you will have this paid off. Get intense! You will be happy that you did in a few years.

    Hope this helps!

  3. Reply
    February 4, 2011 at 3:48 am

    You need to do some math.

    $ 14,000 at 6.4% for thirty years is $ 88 a month or a total of $ 31,700 to pay off $ 14,000 in debt.. Assuming 14.0% on credit cards, paying $ 200 a month for 12 years pays everything off and cost you less in interest. $ 400 a month pays them off in 3 years and saves you $ 27,000 over doing an equity loan.

    The cars- Is your car loan at 8%, 10%, 12%, what, and for only 3 more years! At 6.4% for 30 years that $ 15000 car debt will cost you over $ 94 a month for 360 months or a total of $ 34,000. Not to mention you will be paying on vehicles long after they become landfill junk. Guessing your car loan(s) have 4 years left and are at 10% that is $ 380 a month for 48 months for a total cost of $ 18, 200 for that $ 15,000 debt. That saves you $ 16,000. And you should have some value left in the cars once paid for.

    You really need some sound financial advice. A bank or credit union is a store. They are trying to sell you something. Find someone who can help you get a budget, follow a budget and start paying yourself, not a bank. This loan won’t be free either. There will be fees.

    FYI: Income of $ 110,000 X 75% (taxes) = $ 82500a year or about $ 6875. a month.

    Mortgage $ 1460
    Autos $ 380
    Credit Cards $ 400
    Student Loan $ 300
    Total debt $ 2540

    That leaves over $ 4000 a month for utilities, food, entertainment, clothes, etc. Unless I’m missing something and based on some pretty blind assumptions I’d say your problem is spending not debt.

    Why bury yourself for 30 years for stuff you will need to buy (cars, credit card) before its finished.

    Good luck !!

  4. Reply
    February 4, 2011 at 4:16 am

    Do ing the math out like the guy did above me is your best option and take it one step further take all the money you save put it on top of your monthly mortgage payments each month and I would be willing to bet that you take almost 10 years off you loan…and now all that interest you are paying is TAX DEDUCTIBLE!- whereas it was not when was a car loan and credit cards-. So this gives you the option to payoff all your debt(which help your credit score), writeoff more on taxes, gain more monthly cash flow, and payoff you mortgage faster. Might take a little while doing all the math but the value potential is definatly there.


    Email me anytime

  5. Reply
    caleb b
    February 4, 2011 at 4:41 am

    Many lenders can assist you if you have bad credit. Now more than ever before, bad credit mortgages are much more common place. One of the first and most important items to come under scrutiny will be your current source of income. Lenders will want to know you can make your mortgage payments on time. Your job security will also be looked at before the lender approves your bad credit home loan. Read more from:

  6. Reply
    February 4, 2011 at 5:21 am

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