Re-Financing with bad credit..anyone done this?

**kettlecorn** · 05-27-2008, 07:37 AM

I am posting this from another post I had made on the Stay at home mom board. Here is a little bit of our situation

DH and I have a ton of CC debt. What is on my signature is just the tip of the iceburg. We are in CCCS right now and although I have no complaints, we still have about 3 years to go. We shell out $800 towards it and try to attack it even more. Problem is, I work nights. And it is killing me and basically destroying my relationship with DH. I am so tired and am crabby and all we do is fight. But the money is good and I am afraid I wont make enought to cover the CC debt. If we didnt have that I wouldnt have to work. Which is what I really want to do, be SAHM mom that is. So someone suggested we roll the CC debt into the home. I never really thought about it, I mean years ago we toyed with the notion (with an interest only loan though-thank goodness we never went through with it!). We would re-fi, roll the CC into the mortgage but a fixed only rate. From my calcuations it would be about $200 more a month. Yes it would take longer to pay off but the pressure would be lessened and we can still try to attack the mortgage, instead of the mortgage, CC, you get the idea. Problem is, we have a FHA with a 5.75 % interest rate. Even if we had perfect credit we would never get a rate like that again! Obviously, our credit is bad-do you think anyone would consider us? I know the interest rate would be higher. Has anyone had any luck and if so, with who? Thanks for my rambling.

**YankeeMom** · 05-27-2008, 07:45 AM

I'm not positive, but you may want to contact CCCS and see if that would breach your contract with them. I know when we signed up for CCCS they said NO MORE lines of credit. I don't know if a re-fi would count as a new line of credit...

**kettlecorn** · 05-27-2008, 07:47 AM

True, I do need to check with CCCS about this. Although I am not sure how DH would even be about this. If it takes pressure off though, it may be worth our sanity?

**Frugal Nurse** · 05-27-2008, 07:55 AM

Nope. Don't do it.
You have certain protections with the FHA loan that you don't want to give up.

So, I read your other post. I see that you've got more debt than listed.

Now... this is what I see will happen (I see it ALL the time). You will ADD $200 to the montly bill (but happily be about $600 less)

You will incur NEW debt.
That's right. You'll max out the cards again and fall behind.
Except NOW your morgage payment is $200 MORE.
And you've put your house on the line now.
I see it ALL the time.

People who say... 'No.. I won't do that" are the ones who do it. If you incurred debt at the amount you have and I'm asuming it's up there- you will have the same problem. It's an addiction. when there's money... there is spending.

You could be totally reformed. I don't know. But based on the new debt of $3000...

Consider the finance fees (which I am certain you've already paid through the nose on the cc's) you will be adding to the debt. Is it the smartest and cheapest way to do it? Prolly not.

And if it's debt you incurred just pay it. be honest. You'll feel better about it too.

Lots and Lots of moms WANT to stay home, but can't- for economic reasons.

You're taking the right steps to get yourself back home- accept that you've erred in the past, and you're paying for it now.

That is how lessons are learned.

Let's not move money around- it's all going to be the same debt.
Just keep plugging away... learn frugality until you own it... and then come home.

**kettlecorn** · 05-27-2008, 08:05 AM

Thanks Frugal Nurse, I needed that. You are right about the whole thing. I just want a quick fix. I just feel so guilty and stressed out, oh well. I have got to keep plugging along I guess. Ugh, I wish I was young again!