forget it. actually was HELOC.

[pam333]

I had a question and typed a long message. Then I dropped the mouse and hit a wrong button and lost it all. Have no energy left to type it all again. Nice to meet you all anyway. Maybe tomorrow I'll stop by again. Pam
P.S. My post was a question about getting a HELOC. Anyone with experience with this?
WOW, I love being a "junior" anything. I am 66 years old! and BTW, a "transfer from the Budgegt STretcher Premium forum.

[terry1156]

I absolutely hate it when I type out a long question/answer and accidently do something to erase it. I know the feeling well.

I have taken out a HELOC (home Equity Line of Credit) in the past to do some home repiars and upgrades to my house. I guess the question of whether or not it is worthwhile is what exactly you need the money for.

When you have rested a bit and can provide a few more of the details, I sure that a number of members will give you their opinions.

[pam333]

Thanks Terry for yout reply. My dh and I have gone back and forth in our decision on whether to get a HELOC several times. We are now in the "Yes" mode. After having trouble trying to reach the first company by phone (we had recevied aproval papers from them but they said we neede flood insurance. And we are not in a flood zone) we decided to forget it. Then yesterday we got a tentative approval from another bank and decided to go ahead. So, of course, today the first co. called with appologies for not returning my calls sooner. And she was very sympathetic about the Flood insurance thing and is going to look into it. Really seemed to believe me when I said we are not in flood zone. (Our mortgage would have required it
if we were). Now my problem is should we take out a HELOC, and if so, what do I do about having 2 applications? As to what it's for - it's a home imiprovment in reverse. We added sunporch to house, in addition to repairs, and consequently now have high balances on credit cards. We can pay them and our bills every month but have no cash left over. We are both Senior Citizens on Social Security and don't want to be in this position of having high monthly payments and then nothing left for anything else. if we were young we could just wait it out but we probably won't live that long. Just would like to be sure having a HELOC would be easier than credit card debt.
I know they are and "unsecured" debt but they still worry us all the time. See what I mean about long notes. Better quit. Hope to hear opinions. Pam

[terry1156]

"what do I do about having 2 applications"

If you decide to do it, then take the one that gives you the best interest rate or overall deal.

"We added sunporch to house, in addition to repairs, and consequently now have high balances on credit cards. We can pay them and our bills every month but have no cash left over. We are both Senior Citizens on Social Security and don't want to be in this position of having high monthly payments and then nothing left for anything else."

Let me make sure I understand this correctly. You plan is to take out the home equity line of credit to pay off your credit card bills and thus have smaller payments since the interest charges are less. Is this correct?

This is a sound idea if you don't let your credit card debt go up again. If you do, I think you're better off not taking the line of credit. The reason being that the line of credit is secured against your house. That means if for some reason you can't pay back the line of credit, they can take your house where the credit card is unsecured debt so they can't go after your house.

Here is an article that gives the pros and cons of the home equity line of credit better than I can.

[pam333]

Thanks again terry for reply. I tried to quote the part where you asked question but don't know how. It was about WHY we are applying for HELOC. We just bought the house 3 years ago and have a low rate on the mortgage but we need money to pay off credit cards. I have "studied" everything I can find and I believe the payments on a heloc would be much lower than our minimum credit card payments. So we could pay off credit cards and make lower monthly payments on heloc (including paying more than minimum) and have more cash in hand each month to use instead of credit cards. We have almost completely stopped using the credit cards already but it's a very tight squeeze, especially towards the end of the month.
I realize that the credit cards are unsecured debt, and the heloc puts the house in jeopardy, but I'm sure that we can pay the heloc back unless the rates really jump up or something drastic happens. But that's one of those "you never know" things in life. Also, since we've only had the house 3 years we are still really only paying interest on the mortgage. The one thing that worries me is that the Loan companies only tell us what the interest rate will be for the first month, or the first 3 months. No one seems to want to give equity loans (with fixed rate). They will only talk line of credit. One company has given us a good offer (at least to
begin with) but we are disputing their requirement of flood insurance. We are waiting for a written offer to arrive from another. If they say Flood Insurance we may just give up. We live in a rural area and one end of our "lane" is low and crosses a little brook. But we are on the other end of the lane which rises up a hill from the brook. But the FEMA flood maps don't have house numbers etc. and no one asked us which part of the lane we are on.
Sorry, I digress. Hate all this "red tape". Makes me admit there are some advantages to renting.

[2moretrees]

I am not an expert here, but it seems that you have spent a lot of time thinking through this. If you are no longer using credit cards and are wanting to lower your payments, it seems like a good move.

I know what yuo mean about red tape. That can be the most exhausting part of anything. You just have to hang in there and keep pounding away until you break through it all.

[terry1156]

If you are sure that you can keep the credit cards clear and it will help in yuor overall finances, then I don't see anything wrong with it. You seem to have done your homework. Good luck with clearing up the red tape and let us know how it turns out.

[pam333]

JUST TO BRING THIS STORY TO AN END. I HOPE. We applied for 2 HELOC's and were approved for one and on our way to being approved for the other. Then we ended up canceling them both and refinancing our mortgage instead. Reasons: 1.HELOC's have adjustable rate and the prime rate is going up now. 2. We got a lower and FIXED rate on the refinance. Yes. it means starting over on a 30-yr mortgage but at our ages (66 and 71) saving money 30 years from now is not a concern. We had 27 years to go on our old original mortgage anyway.
We should have it wrapped up by the end of this month.
What I have learned from this: deal with a reputable, established company who will come to your house IN PERSON and sit down and talk it over with you. Don't just deal by phone or over the internet. We live in a rural area and this man we dealt with had to drive 3 hrs to get here.
End of story. But I will be glad to answer any questions if anyone has any since I have learned a lot from this, and previous, experience. Pam

[terry1156]

It's good that you found a solution that works best for you. Hopefully that will take down your monthly payments and you won't have to worry about the credit card debt anymore.