[berlinsmommy]

Maybe we just need to start a finance forum. I know FW has one, but there is SOOOOOO much info there and if I ask a question I'm sure to get flamed. Here it goes:

I have some credit card debt that I need to get rid of, and DH has a student loan that is obscene (over 7%!!). We consolidated the loan because we had to to get this house, and from everything I've read, we have no other way to lower the rate since we already consolidated and locked. This loan has a balance of about $25k.

We have a VA loan on our house and we currently owe $169k. I just got our tax appraisal, and it is $198k, and in this area the tax appraisals are usually low, the house would probably appraise/sell for around $210k.

I would be willing to do either a HELOC or a Home Equity loan, but I was leaning towards a HELOC because if I couldn't get the credit cards and the student loan on it, in the future as I paid down the HELOC I could transfer over more debt. I'm also a little nervous about going 100% LTV on the house, I don't want to be upside down in it in case we ever did have to sell or move. I'd initially like to borrow about $20k against the house (but I'm okay with having my HELOC be 100% LTV, I just wouldn't charge it up that high).

We do have good credit, no repos, forclosures, collections, or anything like that. I probably have a few (1-3??) 30 day lates on there, but I may not have any, but our debt to income ratio stinks right now, I don't go back to work full-time until October.

What do you guys think?? Rates are really good and since the house is collateral should I try to do something now? Should I wait until I work full-time? Should I do a HELOC or a Home Equity loan? If so, where should I look for the best rate/fee combo for my situation????

[LeggsRobbins]

I don't know anything about it, but you're rught. A finance forum would ROCK. FW does tend to flame you.

[skinnje1]

With the recent increase in prime the interest ratse for home equity will soon be 7% which is not much different than the student loan rate that you are currently paying. If you get the credit card offers that offer 0% for at least a year and no balance transfer fees I would do that to pay off the high debt cards. This assumes that you are discplined enough to not charge on these cards and never use them for anything else. The bad things about these 0% cards is that if you use them for other purchase the rates are higher and when you make your payments they go to the lowest interest rates balances first and you will start accumulating interest charges on the daily purchases that you have. When I do these offers I put the cards in and envelope and never use them. If I haven't paid the balance when the 0% time period ends I just do another offer to pay off the balance. I don't have a ton of cards but I do flip them and I do have an excellent credit score since I always pay on time and this has no effect on my credit rating.

I just did one where it was 2.99% for a year and then it dropped to 1.99% for the life of the loan. I transfered my 20,000 balance from my home equity to this card since the rate was lower (6.xx% on the home equity). Even with the loss in tax right off it was cheaper. I am saving over $60 per month in interest charges ($720 for the year).

There are also several new thoughts that instead of making above minimium payments on all loans is that you should pay the minimum on all accounts and then take one card and put all your extra to that card. The idea is to eliminate the number of open lines of credit that you have. They suggest starting with the smallest balances first. If I had a huge discrepancies in the rates on my cards I am not sure if I would pay the smallest first but I would pay the one with the highest interest rate first if there was a significant difference in rates.

[nibblesaurus]

Can't help much w/ the heloc info, but as far as the student loan, you consolidated at 7%!? Rates were 2.77% last year...

I work as a financial aid officer at a college and to my knowledge you can only consolidate once. There are a few benefits to lower that interest rate - if you make payments ontime for 24 (or 4 months, they may be able to lower it by .5%, not much but it helps.

[LeggsRobbins]

DH and I should have consolidated while the student loan rates were still around 3%, but what with the baby and the car and all, we didn't. Now they've gone up to about 5%. Is there any way to get them back down lower?

[berlinsmommy]

Originally Posted by nibblesaurus

Can't help much w/ the heloc info, but as far as the student loan, you consolidated at 7%!? Rates were 2.77% last year...

I work as a financial aid officer at a college and to my knowledge you can only consolidate once. There are a few benefits to lower that interest rate - if you make payments ontime for 24 (or 4 months, they may be able to lower it by .5%, not much but it helps.

Yep, we consolidated back in 2000 so we could qualify for this house. At the time we had no idea that Sept 11 was going to happen and that interest rates would bottom out, so back then the rate we got was a good one (the house was at 8% with great credit, but of course we refinanced that to get it much lower). Since we've already consolidated and locked in, I don't think there is much we can do besides make our payments ontime with automatic withdrawl, which we already do.

[scpend]

Check Clark Howard's website - I remember him saying something about being able to consolidate again if you went back to school, took a course, and took out a new loan. Don't remember the details.

Be careful transferring debt that is unsecured (credit cards) to debt that is secured by your house. If you can't pay your credit cards, they can ruin your credit. If you can't pay your HELOC, they can take your house.

[notatenanine]

I did not consolidate my student loans in June before the rates went up. There was just no way I could since I have not found a job yet. I would have lost my grace period instantly - I could not afford to take the risk..and good thing I did not because I still have not found a job.

[berlinsmommy]

Woohoo, In searching the finance forum on FW, I found the answer for my student loan dilemna, and its right here in my own backyard!!! Its called UHEAA or the Utah Higher Education Assistance Authority. DH already even has an account there, they manage one of Berlin's College Savings plans (DH and I have separate ones, and his is thru UHEAA).

Anyway, even though I cannot do much about interest rates, they give a 1.25% rate reduction if you set up automatic withdrawl and another 1% rate reduction if you pay 48 consecutive payments on time, woohoo, I'm having DH drop off his application today!!!

P.S. You do not have to live in Utah to do this!!!! See my post here for more info:
http://www.pinchingyourpennies.com/f...ad.php?t=21568

[jgeorgie33]

Originally Posted by nibblesaurus

Can't help much w/ the heloc info, but as far as the student loan, you consolidated at 7%!? Rates were 2.77% last year...

I work as a financial aid officer at a college and to my knowledge you can only consolidate once. There are a few benefits to lower that interest rate - if you make payments ontime for 24 (or 4 months, they may be able to lower it by .5%, not much but it helps.

in some rare circumstances, i'm pretty sure you can consolidate more than once. i used to work for a small privately owed lending company. another option is to refinance your consolidated loan. here's some more info: student loan consolidation