About 4 years ago, we were in a mountain of cc debt and decided to take out a home equity loan to help pay it. We had bad credit and didn't do the homework we should have done before taking out the loan. We ended up with a loan from Champion Mortgage with an interest rate of about 13%.

We have been paying for 4 years now, and our loan got sold once to HSBC. In that the interst did go down to 12.25% and we still have about 11 years left on this loan.

I want to refi this loan with a reputable local bank and see about getting a lower rate. Dh wants to do nothing though he does agree we need to do something.

We are doing well at getting all our other debt paid down and are almost debt free except for this equity loan.

Any advice about getting this paid down or off?

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~Missy~Mommy
Meghan8.Samantha7,Cameron4

Definitely refi!!! You could easily drop 5-6 percentage points in interest right now, if your credit score is good now.

Once you do that, I would treat it like any other loan or credit. Attack the highest interest first.

If you can get a lower interest rate and can pay it off in a timely manner, then go for it, but just remember the bottom line about HEL's...you aren't really paying off debt...you're just moving it from one place to another (albeit possibly at a better interest rate).

It never hurts to ask

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Just be sure to shop for a no fees/no points loan - they do exist, but the credit crunch may make them rarer, so you may need to wait. That interest rate is def. way too high. You just don't want a refi to add to your costs w/its fees. And remember to keep it to a lower term - in other words, if it was for 15 years and you have 11 years left, don't let them talk you into doing 15 years. You can get an amortization from them to be sure, but I think you're paying enough interest still each month at this point to make refinancing worthwhile.

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Take a look at Compare Mortgage Rates | CD Rates | Credit Cards Home Equity Loans Mortgages Best Rate Calculator Bankrate.com
I have this site bookmarked to keep tabs on interest rates.

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Attaining financial freedom is like eating an elephant . . . it takes one bite at a time.

I have an acct with a credit union and I've taken 2 small personal loans with them when we need some extra cash for an emergency. Do you think I would have better luck dealing with them as opposed to a bank?

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~Missy~Mommy
Meghan8.Samantha7,Cameron4

I'd say shop them and compare them to others. Credit Unions try to sell you on the idea that they offer you the best due to your relationship, but in truth, they have the same underwriting rules as the others. Shop.

I'd also pull my credit reports first to make sure there are no inaccuracies or anything that needs to be cleared up.

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Make someone's heart smile today.

We did some remodelling on the house and, when we were done, rolled a home equity loan, into our first mortgage. We re-fi'ed through Quicken and they did a great job.

The problem with re-fi'ing when you are trying to clear up unsecured debt is, technically, that portion is taxable. In other words, you aren't supposed to write-off that portion of the interest on your taxes - forever, and ever and ever - as long as you own that house. But of course, you've already probably been writing off your HEL interest.

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"I've been rich and I've been poor but independently wealthy is where it is at."

I found that my credit union offered better rates and better options than my bank when it came to getting our HELOC. I also like knowing that my loan isn't going to make stockholders rich, but rather is used to support the CU and our memebers. (Well I realize that there are people making money, but its a smaller CU so I feel more a part of it.)

I would definately shop all your options and lay it all out with fees included.

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Grace

Wife to Stoney

Mommy of Sarah (8.5), Hannah (7), and John(5)