Need some advice on this crazy idea!!

**handmerounds** · 03-30-2006, 09:33 AM

Hi ladies! Ok, we are going through a lot of changes in our life right now. I really like Dave Ramsey's ideas and have been trying to incorportate them into our life.

1. I will graduate with my teaching degree this summer. (presently a stay at home mom)

2. Moving back to our hometown.

3. Sold our big dually to get rid of the payment and paid cash for a used truck. (payment was $565 per month.)

4. Selling our other truck with a payment in just a few days. ($232 per month)

Here's the problem we own our house/land but we have a second mortgage (bad idea) and we want to list our house but don't think it will sell for the full price of both mortgages plus real estate fee's. Our second mortgage is $27,000. I would be able to transfer this amount to credit cards at a lower interest rate, hopefully 0%. ( I know they can change those rates at anytime.) But our second mortgage rate is almost 14%! We still owe what we borrowed 2 years ago practically. So I've read some of you say never put your credit card debt on a 2nd mortgage, so what about vice versa? I know it is just a temporary fix. I would appreciate some advice on this idea!! Please!

**JustMegan79** · 03-30-2006, 10:26 AM

Good Morning!

It sounds as if you are on the right track by selling unneeded vehicles. About the 27k second mortgage, have you soncisered taking the money saved in Payments, (since you would have been spending it anyways) and adding it ALL as principle onto your second mortgage each month? I dont know how exctly that works, but it seems to me that would cut it down quickly. This way, you are much much closer and faster tp getting rid of the second mortgage. If you can sell anything at ALL (anyone will buy most anything), have a yardsale, eBay, pantry cook, have a slash and burn black belt no spend month (or three!) and add all to second mortgage,
My thinking is if you can get rid of the second mortgage before you list you rhome, you are now way ahead, have saved many dollars in interest due to the 14% int rate, and if you property value has gone up in any way since you bought, then when you sell it may net you a profit before moving away.
I know this strategy may make the plans for moving back take a little longer, but to me it seems preferable to adding that large amount of money to cc's.
Plus, w/o thata debt to income ratio, (the ectra27k), you may get a better rate on a new mortgage in your hometown.

Just My 2cents.

Megan

**handmerounds** · 03-30-2006, 10:39 AM

Thanks for your advice! It makes a lot of sense.

**ladydi** · 03-30-2006, 07:39 PM

handmerounds,
First of all, congratulations on your teaching degree!! That's a wonderful accomplishment.

You bring up some great points about getting a lower rate by using a credit card. But having 27k in cc debt would make me really nervous. I know your 2nd mortgage rate is high and I don't know if there's anyway you can have the rate lowered, but if you use all the money you save by getting rid of your cars and then start snowballing the dave ramsey way, maybe you can get that 2nd mortgage amount down relatively quickly.
I try not to move money around a lot just because I always get caught up in the illusion that somehow by doing that I don't have as much debt. But the truth is, I do. So I've learned to just leave it where it is and get down to the buisness of paying it off (or selling it if I have to).
That's what works for me, but you may be different and you certainly have some really good points for doing it the way you suggest.
Again, big congrats on your becoming a teacher!

**FrugalMomof3** · 03-30-2006, 08:36 PM

Sounds like your totally on the right track, I wish you the best of luck in everything you decide to do.

**handmerounds** · 03-31-2006, 09:30 AM

Thank you, sometimes I feel so off track! Waiting to hear about a job is tough, I'm trying to be patient! It is funny how easy it is to spend the money and buy things and then how hard it is to pay the money back. We have made some really "bad" decisions when it comes to money, but I we have learned our lesson.

**duchess** · 03-31-2006, 11:18 AM

If nothing else, negotiate with the real estate agent for a lower percentage OR sell it yourself. Unless you have to sell it next week, you could have a few open houses and save yourself 6 - 7% of the asking price.

I have no idea the asking price, but if your price is $200,000 and you get the agent to sell it for 3%, that will save you $6,000 alone. I realize that it's not a sure thing, but if it's a seller's market or if you KNOW someone who would cut you a break, give it a try.

Also, are there any "free" updates or improvements that you could do to bring a higher asking price? Think "Sell This House" on A & E.

Good luck.

Btw, if your asking price is leaving you with nothing after closing, where will you live when you move? Just curious.

**handmerounds** · 04-01-2006, 02:21 PM

We may try to sell the house ourselves, I think we could get close to payoff if we didn't have to list with an agent. I am getting a small inheritance soon from my grandpa that passed away in January and we are buying 30 acres of land with a well and electric in our hometown. I wanted that money to go to something special. We are going to build a house on the land eventually, may build a shop to live in while we are working on our house. That's another story!! LOL

I am selling a few things on ebay too. We actually sold our little ford festiva for $1375 this morning on ebay!! So that money will go on the second mortgage to pay it down a little. Also I have an interview Wednesday for a teaching job in my hometown. Keep your fingers crossed for me!! Thanks for all the advice! Keep it coming!

**motivated** · 04-01-2006, 02:48 PM

That extra money to pay down the second mortgage sounds great idea - just make sure that you impress on them that it is to pay down the principal and not the interest rate.

Hope all goes well with the sale and move when the time comes.