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Subject:  Re: I'm Drowning...advice on refinancing mortgag Date:  8/1/2010  8:51 PM
Author:  aj485 Number:  298721 of 312702

To answer some of the questions, there is no other balance on the HELOC - just the payoff of the original mortgage which was done to get the payments where I could manage them (paying interest only on $53,000). There is very little chance that we will lose the house with the payments so low.

This might be an okay attititude to take for now, but not for the long term. For the long term, you are treading on dangerous ground.

Your interest only payments on the HELOC have a limited time frame. After the original draw period is over (often 5 years or 10 years - read your contract), you will probably have to start making amortizing payments, which will significantly incrase your payments. How much it will increase is dependent on the terms of your HELOC contract.

Additionally, as the rate that your HELOC is based on (often the prime rate) increases, even your interest-only payments will increase. Many HELOCs do not have cap on the interest rate. The prime rate is at historical lows of 3.25%, and has been as high as 21.5% http://www.wsjprimerate.us/wall_street_journal_prime_rate_hi... If your HELOC is at prime + 1 with no cap, your monthly interest only payment on $53k would be $994 - over an $800 increase from the current prime + 1 payment of $188. Even if the prime rate doesn't get back to historical highs, but just increases to, say, 8.25%, where it was 4 years ago before the credit crisis hit, the payment would increase to $409.

If you quit making payments on your credit cards or if you declare BK, you are likely to have little to no chance of refinancing into another HELOC so you can continue to use the I/O 'feature' to keep your payments low.

However, if you've never experienced being afraid of someone then you can't relate to what I'm trying to say.
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To address the comment regarding the cash advances to pay for my mother's caregivers, since DH hated her and made daily comments about how much time I spent looking after her, he made me feel like I couldn't share that particular piece of information with him.


Unfortunately, by taking the course of action you took, you will probably appear to your husband to have chosen your mother's financial well-being over your husband's financial future. However mad he may have been then, he's probably going to be a lot madder now. If you are scared of him, you probably need to look for a way completely out of the relationship that will provide you protection.

AJ
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