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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: bozwood who wrote (2477)4/25/2002 12:37:08 PM
From: GraceZRead Replies (1) of 306849
 
Frankly, I'd rather see people take out an unsecured lower rate consolidation loan than roll debt into the house not only because of what you mentioned, the risk of losing the house, but because when you take out these consolidation loans they make the borrower cut up their credit cards on the spot. Someone who has had trouble with credit in the past needs to learn how to live without the privilege for a while. Maybe even use the envelope system.

The exception to this might be if the credit problem is exceptional (the person usually has no trouble paying bills until a job loss or illness sets them back) and the home equity loan is at a lower rate then the consolidation and its a term loan five years or under. The worst thing is to roll it into the house as a line of credit with no fixed payoff date, or if the debt is added to a thirty year mortgage during a refi. Who wants to be paying interest on a TV they bought for the next thirty years?
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