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Author: LaraAmber Big red star, 1000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 308722  
Subject: Re: Bankrupt or try to 'gut it out'? Date: 11/2/2012 10:25 AM
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The thought of re-setting the time clock back to ZERO . . . is not very appealing. However, if I can re-fi with a 15 year and still pay pretty much what I am paying on mortgage number 1, then that would be a good deal. But, I don't know if I can do that and I guess the only way to find out is to get off my butt and go start talking to some credit unions.

Your thoughts?


Who says the clock would be reset to 0? Plenty of people refinance solely to take advantage of a big change in interest rates. When we refinanced we went from a 30 year to a 15 year and ended up making the same size payments because the interest change was that drastic in the five years since my husband originally purchased the house. If someone was keeping the same terms, they could continue to make their original payment amount. That extra money each month towards the principal erodes away the years until paid off pretty quickly.

You aren't ready to refinance. You would likely need to have $2,000 cash for closing costs. Right not it's a distraction from what you need to be doing: tracking every penny you spend and creating a year long budget. You need to figure out your monthly expenses and irregular expenses. You need to start figuring out what you need to set aside to get your baby emergency fund ready so the next crisis doesn't go on the cards.

When you've gotten the boat to stop taking on water and the bilge pump(that would be your debt payments) working, then you can figure out when you can start setting aside money for refinancing costs. If your wife can also show a steady paycheck that would also help your refinancing chances in the future.

Right now wouldn't be a good time to do any unnecessary calls to banks, credit unions, and insurance companies regarding houses. They are probably being inundated with calls regarding damaged homes and will be for some time.

Lara Amber
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