I owe 108,000 in credit card debt

Hi Mirtle,

Based on what you have described and what you want to accomplish, a hard money lender is what you're looking for.

However, please be aware that the interest rates and closing costs are very high. But, with all that equity, you should be able to negotiate relatively reasonable terms.

Also, you'll want to find out if they will require the credit cards to be paid off at the time of the loan.

If they do, you may want to ask them if you would still qualify for the loan when you're 90 - 120 days behind on your credit cards.

If you will, then you could negotiate settlements with your credit cards simultaneously, while they're putting your loan together. With the goal of settling the credit cards all at the same time with your loan.

By doing it this way, you will only borrow what you actually need, since you'll be familiar with the cost to settle when you're finalizing your loan.

This way you'll be able to keep your new mortgage payment to a minimum and accomplish all of your goals.

You'll want to sit down and do a lot of math to make sure everything makes sense before seriously pursuing this option. Again, these loans are very expensive.

Have you applied for an FHA refi?

Please feel free to follow up with any questions. Good luck.

Hello Mirtle,

Did you report rental income on your tax returns? A good home loan is now based solely on income. To qualify your gross annual income should be right around 36-40k. Assess your income situation and determine how much you make per year. This will identify what options you have.

There are loans out there that you can qualify for without income that are solely based on your home's equity, however the rates are pretty high but the problem of monthly cash flow would be decreased dramatically. They're non traditional and usually have a shorter payback period, the lender is basing it solely on the house's equity. It's also faster and less qualifying is involved. When income is better and you can qualify for a traditional loan you definitely want to refi out.

If you are over 62 you can also look into a reverse mortgage. You will not have any payments and you can pay off your credit cards.

I am estimating that you are currently paying around 2200 to 3000 a month just in credit card payments. Your payment on a mortgage taking out 170k should be right around 1200-1500 including taxes and insurance on a 30 year fixed mortgage.

Planning is the key to all this. Make sure you have an exit strategy because all the unsecured debt you have now is being converted to a secured debt.

As far as settling your debt. You will have to refinance first before you do anything like this. Settling requires money. One note is to look into a Chapter 13 BK or Chapter 7. Find out if either of these options will allow you to use your existing income to pay off your creditors without having to touch your home's equity. I do believe only a 13 will allow you to do this. Before you make any decision assess your financial situation by doing a budget, project your income for three years, be realistic... After all this, research all the options and choose the one that best fits your finances. Do not be mislead by people telling yo a BK is bad and you'll never recover. Every financial tool has a purpose, pick the one best suited for your particular situation and use it your advantage.

You are fortunate that you have equity in your home. Use it wisely and I hope this helped.

I had 108,000 in credit card debt as well -- I do have some equity left in my house but do have a mortgage -- I tried and tried to refinance but because of my high debts they would not do it -- my debt to income ratio was too high -- I did end up doing a loan modification and this lowered my payments. However I decided to settle. I am a little more than half way done -- I also used my retirement $$ to settle -- but declared insolvency -- since I had nothing left to draw off except the ira money -- the irs could see the withdrawals =-= I am still finishing off the last ones by selling things but I am trying not to go the bankruptcy route -- it lasts on your credit for 7 years and if you can manage to sell cars or anything else you have to draw up cash -- it might pay in the long run -- good luck to you -- message me anytime