Debt Settlement Blog

The real estate market in the last 6-8 years has performed well beyond expectations. With house values on the rise this offered freedom to home owners that were looking to use equity to finance purchases, home improvements or even pay down credit card debts. For those that used their equity wisely the benefits are paying off. However for most homeowners it may have been the first step into a financial hardship and many are looking to avoid bankruptcy.

Did you do the numbers correct when you used your equity to pay off a car loan? Many people did not. Most home loans are paid over a 30 yr term. And most car loans are paid over 5. The first down side is that the interest that you will pay on the portion of equity used to pay off the car will far exceed the amount on a regular car loan. You may say “yes I agree however the payment goes away.” It does? When you refinance your home and take cash out typically the payments will go up. If you are taking the money out and keeping the term the same the payments would rise. However most times people don’t keep a car for 20+ years. In a few years when you need another vehicle the cost of the new vehicle plus the increase in the mortgage payment will have you paying more than what you were before paying off the first vehicle.

Did you put an addition on your home or maybe put in that pool that the kids wanted? Congratulations you have just increased the value of your home. Hopefully the value will rise and you will be able to sell your house for a profit.  Your house should be worth more than houses in your area that don’t have upgrades like your home does.

Did you use your equity in your home to pay off credit card bills?  Well that was probably not the best financial decision you have ever made but with so many consumers obtaining sub-prime loans the enticement factor by your brokers was overwhelming.  Credit card debts are the most difficult to deal with.  The interest is revolving and the payments are higher than standard debts.  The interest principle’s mentioned above are the same for credit card debt and equity loans.  You will still pay the same amount of interest on a credit card as you will on the amount you financed against your home.

Many of our more recent clients we have been finding have been financing their rental or second property on credit cards.  Upon reaching the maxed out point then and only then are homeowners seeking relief options but for many it may be too late.  If you have found your self in a situation that you have managed to accrue credit card debt in excess of $15,000 dollars then you should be seeking some sort of debt management program to get your financial condition back under control.

Debt settlement may be right for you.  Call today 1-866-791-2455