My dh and I are trying to consolidate 2 car loans and student loans. Plus our old house (built in 1875) has a few plate glass windows that need to be replaced and the furnace/heater needs to be replaced as well. (we're spending way to much on oil - like $400 a month-even thought we keep the temp. at 64 during the day and 60 at night!!) We're trying to decide the best way to get everything paid for at the lowest interest rate and do it before the baby comes in 7 weeks. We owe 25 years yet on our 30 yr. mortgage and were orginally going to refinance and take cash out but then we'd go back to 30 years again-UGH! We aren't planning to move for about 7-8 years. So we thought perhaps a Home Equity Loan would be the better way to go. Any thoughts on this would be greatly appreciated!!!

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WAHM to Richie, Becca & Ryan!

I would never ever convert car loans or student loans into a HE. If something happens, would you rather loose your car or your house? As far as SL - if you fall on hard times, you can request a "hardship" deferrence. Can't do that with mortgages or HE loans.

What you might want to do is get a HE Line of Credit. This way, if you need to borrow $$ to fix windows, you can do that and then pay back and not change the terms of your mortgage.

Lena

We did the home equity loan thing and it seemed like the solution to our problems. The only problem was that we didn't have any equity left in our house and we just got ourselves back in trouble with other things. We have refinanced our house once since then and, although we could have taken out more equity (our house value raised a bunch in just 2 years) we just refinaced what we owed for a lower interest rate. If you are putting that money back into the house to improve the value, I would say go for it. If not, I would see if there was any other way to get the money you need.

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Frugal is being wise with your money and resources and cheap is forcing everyone else to.

I totally agree. You don't want to put yourself in a situation where you hit hard times (God forbid) and you loose your house. I will never again do a HE loan. Plus too if you move you have to cover the loan on the mortgage and the HE loan.

Our main issues are that it's going to take at least 12,000 to get a new furnace/heating system and replace all the old windows that need to be replaced. Right now we simply can not afford to take on any new loans and have any more loan payments added on to what we have now. If we take out the HE loan we would be able to do the work on our home (which would boost it's value) and save over $600 a month in interest and loan payments by consolidating the other loans. We just barely get by now and live paycheck to paycheck and I just found out I probably will not be working after August (I babysit for 2 families and their situations are changing so they will not need child care) I'm afraid that without my income we could get behind on our bills and I may not be able to find anyone else to provide care for since I'll have a 2 month old at that time. I know many people are hesitant to leave their child with a provider who has a new baby. I know the HE Loan probably isn't the best route to take and that's why I was looking for input from those of you who may have done it. I guess we will look into the home equity line of credit as well and see how that would be.

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WAHM to Richie, Becca & Ryan!

I agree, I would never do this.

I don't know what kind of student loans you have. That said, I would never have rolled mine into a home equity loan because thay were insured. Meaning if something happened to me, my family was not responsible for them...the government paid them off. Not true for a HE loan.

just my 2 cents.

My "spin" on HE loans has always been if you need to take one out only do so if you are going to do something to you home (add value to your home by remodeling or upgrading). I think it can be dangerous to use them to pay off debt or buy a new car etc.

Nay!!! We had one and didn't realize that the interest rate isn't set! It changes all the time! We would make $200/month payments for a year and still never made a dent on our principal! We did just refinance, and it would bring your years back to 30, however you don't have to pay for 30 years if you move ya know? Actually if you DO stay for the whole 30 years you usually end up paying like 200,00 in just interest for the life of the loan! If you can I would refinance and pull out some equity. I'm sure your house value will increase over the years, AND will all the upgrades that will also definitely increase the value!!

Good luck!!

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~Julie :love:

For us it would be a set interest rate for the HE Loan but not for Home Equity line of credit ( HELOC) it would be variable.

~You ladies has some great thoughts on this subject and you've given us alot to think about. Right now my dh and I are trying to decide if we should take out the HE Loan and if so for how much. We've now decided that if we do take one out we will not use all the equity we have in our home...only about half of the equity and that way we could get the work on our house done and use anything left over to pay off student loans.

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WAHM to Richie, Becca & Ryan!