If you have a lot of debt now and you want to get things in order, then go ahead and consolidate. The challenge in the past has been that families would refinance to pay off debt, then turn around and run up their credit cards again rather than paying cash. This is absurd, and yes it doesn’t benefit you if you know that your spending habits are hard to curtail. However, at a time like this in a rough economy it is best to downsize and begin setting aside more money in case you do have an emergency. Working off a cash basis will help you stop using these credit cards, and will get you to a place where you can break away from the spending and really think about what you are doing. If you don’t have the money on hand, don’t use a credit card to get it. While refinancing your home to consolidate and pay off debt is helpful, keep in mind that the less you have to consolidate the better off you are. You want to build equity in your home, and in a market where housing prices have fallen it doesn’t help to use it all up. If you have to do it then do it, but if you can pay off some other things on your own then do it that way.
I am here to help you every step of the way, and I will also be honest and tell you that refinancing may not be the answer for you. Not everyone will be in a position to refinance, but refinancing through FHA will give you the lowest rates on the market today, and FHA guidelines focus on commonsense underwriting, so they look at the bigger picture. FHA will look at your income, credit, investments, cash reserves, and how you pay other bills outside of your mortgage.
For more information you can go to www.fhaloansnow.net, or you can call me directly at 310-498-2700.
-Mayer Dallal
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