Home Equity Loans and Bill Consolidation

kimmyo · #1 (**permalink**) 02-25-2002, 07:00 PM

Dh and I are working very hard to pay off credit card debt and also trying to remodel our house ourselves.
We only owe 2 more years on our mortgage!

Our house is old and needed a lot of work when we bought it. We have done all the work ourselves, plumbing, wiring, demolition, dry wall work (except the new roof). We have always been able to do a little at a time as money would allow( a few 2x4's here and there, a little sheet rock here...LOL the man at the lumber store use to ask me how many 2x4's could I get this time?)
We are now at the point where we will have to spend large chunks of money, that we just don't have. (new flooring and cabinets being the biggest expense.)

We have been talking about getting a home equity loan, paying off the mortgage and all the credit cards and finishing the house once and for all.

Has anyone done this? Am I just biting off more than I need to?
I really value everyones oppinion here and would appreciate some sound advise.

We have been remodeling for almost 8 years now and I am really getting sick and tired of living in the mess! I just want to finish!

Shawn · #2 (**permalink**) 02-26-2002, 02:14 AM

kimmyo -

my dh and I did this about 6 or 7 years ago. We were up to our necks in bills and the house did need work. So we took out a home equity loan. The interest was low.

We first sat down to figure out what we would pay off. After that, we took how much we would still owe and and also figured in the loan payment.

We did very well, we paid off every outstanding bill, our car, and still had money to do what needed to do done.

We paid monthly payments for about 4of the 10 years of the loan and then paid off the balance with a nice bonus m DH received.

It was well worth if for us.

Hope this helped.

kimmyo · #3 (**permalink**) 02-26-2002, 02:52 AM

Thanks Shawn, I appreciate your input. Everyone I know seems to think this is a bad move, so it's nice to see that it helped someone else.

Shawn · #4 (**permalink**) 02-26-2002, 03:07 AM

You really need to sit down and figure out what is your monthly income (with taxes taken out).

Then figure out what you are spending a month (mortgage, bills, utilites, car, insurance, food, gas, etc)

Then if you are on the plus and have money left over fine, but if you are in the minus, then this is time to rethink things.

Always figure out the minimum payments when trying to do this as well.

In most cases, a home equity is really not needed, but in our case we were borderline minus money each month. Now we are putting away money and thankfully at this time we are not having these problems.