Author Topic: Is This Worth Looking Into?  (Read 6201 times)

Offline mrclose

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Is This Worth Looking Into?
« on: March 09, 2015, 12:19:16 AM »
My parents have over a hundred thousand dollars in home equity but they also have around fifteen thousand dollars in various credit card bills.

Since they refuse monetary help from me, All I can do is search for other ways to help them!

One of the cards Sears Mastercard is killing them with $350.00 a month payments.
The other cards cost around $150.00 a month each.
Adding them up, the costs are around $600.00 a month in payments.

I scanned the following letter and would like to ask if what they offer would be a better way to go?

I would like for them to consolidate all of their cards into one payment and this offer seems like a good way to go?

Their income is roughly around $3,100 a month with monthly expenses (mortgage, electric, credit cards, phone etc. etc.) at around $2,200.

(I had to reduce the image after scanning it .. from 2600 px to 800px so I hope it's readable)

Looking at reviews for the company (bank), I come up with some good, some very bad.

Seems that an upfront application fee must be paid and isn't refunded if the loan is not approved!

Sounds like a good way for the company to make some easy cash?

Thanks

« Last Edit: March 09, 2015, 12:44:20 AM by mrclose »
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Offline supsalemgr

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Re: Is This Worth Looking Into?
« Reply #1 on: March 09, 2015, 05:30:16 AM »
My parents have over a hundred thousand dollars in home equity but they also have around fifteen thousand dollars in various credit card bills.

Since they refuse monetary help from me, All I can do is search for other ways to help them!

One of the cards Sears Mastercard is killing them with $350.00 a month payments.
The other cards cost around $150.00 a month each.
Adding them up, the costs are around $600.00 a month in payments.

I scanned the following letter and would like to ask if what they offer would be a better way to go?

I would like for them to consolidate all of their cards into one payment and this offer seems like a good way to go?

Their income is roughly around $3,100 a month with monthly expenses (mortgage, electric, credit cards, phone etc. etc.) at around $2,200.

(I had to reduce the image after scanning it .. from 2600 px to 800px so I hope it's readable)

Looking at reviews for the company (bank), I come up with some good, some very bad.

Seems that an upfront application fee must be paid and isn't refunded if the loan is not approved!

Sounds like a good way for the company to make some easy cash?

Thanks



Home equity lines can be quite beneficial. Interest rates now are quite low. However, one has to be very careful with the fees that might accompany the line. The best place to start is with the bank they currently have a relationship with. I would suggest staying away from a "stand alone" HE entity.
"If you can't run with the big dawgs, stay on the porch!"

Offline Solar

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Re: Is This Worth Looking Into?
« Reply #2 on: March 09, 2015, 05:47:43 AM »
IMO, Absolutely Not!!! Your parents have a proven track record of living beyond their means, so this will do nothing to change bad habits.
They need to face why they're in debt first, sell off the crap they bought that's completely useless, and get a grip on spending money they did not earn.

Has anyone sat them down and talked to them like adults, or is everyone treating them like victims?
Looks like no one is recognizing the elephant with the shotgun sitting on the couch in the middle of the room.
Your parents have a serious spending problem, and taking this route, will most likely take their home as collateral when they fail...AGAIN!

I, by no means claim to be a financial expert, but I didn't get rich and retire in my early 40s by living beyond my means, there are no shortcuts in life, as your parents have discovered.
Credit cards are pure evil if you don't recognize them for what they are, someones else's money, and when they want their money, they will start leaning on real property, such as your parents home, which is exactly what loan consolidation is, their way of getting your parents to sign over their home as collateral.

Truth is, your parents made some serious mistakes and it's time to pay up..
Yard sale, sell, sell, sell off the 2nd car, dads tools, all those trinkets your mom collected over the years that she put so much emotional value in and pay off the card with the highest monthly rate.

There is someone they can call, and he'll tell them the same thing I just did, but he'll help set them up with a plan that will work, and maybe, if they're lucky, they won't lose their home.
Sorry to be so blunt, but it sounds like no one else has been the adult in this situation.

Contact Dave Ramsey.
http://www.daveramsey.com/home/
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Online walkstall

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Re: Is This Worth Looking Into?
« Reply #3 on: March 09, 2015, 05:53:21 AM »
Home equity lines can be quite beneficial. Interest rates now are quite low. However, one has to be very careful with the fees that might accompany the line. The best place to start is with the bank they currently have a relationship with. I would suggest staying away from a "stand alone" HE entity.

I would add, ONLY if they cut up their credit cards.  Or they would be right back in the same boat in no time.   As I tell my kids, if you can not pay cash for it you don't need it.  A house is the only thing you should have to pay for each month.
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Offline supsalemgr

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Re: Is This Worth Looking Into?
« Reply #4 on: March 09, 2015, 06:33:29 AM »
I would add, ONLY if they cut up their credit cards.  Or they would be right back in the same boat in no time.   As I tell my kids, if you can not pay cash for it you don't need it.  A house is the only thing you should have to pay for each month.

Point well made. They must adjust their budget. We use cards just to reduce the number of payments we make. Paid in full each month.
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Offline Solar

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Re: Is This Worth Looking Into?
« Reply #5 on: March 09, 2015, 06:39:54 AM »
IMO, Absolutely Not!!! Your parents have a proven track record of living beyond their means, so this will do nothing to change bad habits.
They need to face why they're in debt first, sell off the crap they bought that's completely useless, and get a grip on spending money they did not earn.

Has anyone sat them down and talked to them like adults, or is everyone treating them like victims?
Looks like no one is recognizing the elephant with the shotgun sitting on the couch in the middle of the room.
Your parents have a serious spending problem, and taking this route, will most likely take their home as collateral when they fail...AGAIN!

I, by no means claim to be a financial expert, but I didn't get rich and retire in my early 40s by living beyond my means, there are no shortcuts in life, as your parents have discovered.
Credit cards are pure evil if you don't recognize them for what they are, someones else's money, and when they want their money, they will start leaning on real property, such as your parents home, which is exactly what loan consolidation is, their way of getting your parents to sign over their home as collateral.

Truth is, your parents made some serious mistakes and it's time to pay up..
Yard sale, sell, sell, sell off the 2nd car, dads tools, all those trinkets your mom collected over the years that she put so much emotional value in and pay off the card with the highest monthly rate.

There is someone they can call, and he'll tell them the same thing I just did, but he'll help set them up with a plan that will work, and maybe, if they're lucky, they won't lose their home.
Sorry to be so blunt, but it sounds like no one else has been the adult in this situation.

Contact Dave Ramsey.
http://www.daveramsey.com/home/

Maybe you could simply read this to them, and blame me for being the hard ass, if everyone around them is shielding them from the truth.
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zewazir

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Re: Is This Worth Looking Into?
« Reply #6 on: March 09, 2015, 10:40:34 AM »
As others have said, the biggest concern to be addressed first is why the parents have over 15K in credit card debt in the first place. Until the reasons behind debt are addressed, using home equity to consolidate the debt under a lower interest rate has too much potential to just add another level to the cycle of debt problems, putting the house itself at (higher) risk. They need a financial counselor to help them set up a budget that allows them to live within their means.

Offline mrclose

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Re: Is This Worth Looking Into?
« Reply #7 on: March 09, 2015, 03:46:50 PM »
I have sat with them and have told them the only way I will help is if mom (yes mom) hands over all the cards!

Another idea I have is to consolidate all the cards into a lower rate card and make payments on that.
Good idea?
"When you are dead, you don't know that you are dead.
It is difficult only for the others.

It is the same when you are stupid."

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Offline Solar

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Re: Is This Worth Looking Into?
« Reply #8 on: March 09, 2015, 04:07:51 PM »
I have sat with them and have told them the only way I will help is if mom (yes mom) hands over all the cards!

Another idea I have is to consolidate all the cards into a lower rate card and make payments on that.
Good idea?
Zewazir is correct, they need professional help. I recommend Ramsey as a starting point, but if they aren't willing to cut up the cards, there is no helping them.

Ever tried to get an druggie/alcoholic to quit? You can't, they have to want to stop on their own.
Even a consultation with the bank might help.....
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Offline TboneAgain

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Re: Is This Worth Looking Into?
« Reply #9 on: March 09, 2015, 04:27:04 PM »
Zewazir is correct, they need professional help. I recommend Ramsey as a starting point, but if they aren't willing to cut up the cards, there is no helping them.

Ever tried to get an druggie/alcoholic to quit? You can't, they have to want to stop on their own.
Even a consultation with the bank might help.....

An ex-wife of mine is a good (bad) example. She never saw a credit account she couldn't accept as her very own. Looking back, I think it was a sickness.

When we finally split, around 25 years ago, I suddenly had a mailbox full of statements from accounts I didn't even know about. (I was working out of town in those days, and she was able to intercept the mail.) She had gotten major credit cards in my name, and using my credit record, and maxed them. There were also scads of usurious department store accounts, the kind with 28% interest levied monthly. That little gal left with a boatload of $300 dresses and $150 shoes (in 1991), and left me with the statements. Even the divorce court judge agreed and decreed that she had to pay me back on some of the debts. (You won't believe it, but I never got a dime.)

In the end, I found out that she also had a nose-candy problem, and that certainly contributed to the mess. But I've always thought her addiction to spending on credit was at least as powerful as her cocaine habit.

For my part, I had a blonde-candy problem.  :tounge:  Never have quite gotten over that....
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Offline Dori

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Re: Is This Worth Looking Into?
« Reply #10 on: March 09, 2015, 05:53:55 PM »
How old are they? You have to find out why they are using credit cards first.  Is it for necessities or is it non essential?  Maybe mom needs a budget.  They have $900 a month above their living expenses.  Did that include food? 
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Offline Solar

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Re: Is This Worth Looking Into?
« Reply #11 on: March 09, 2015, 07:07:50 PM »
An ex-wife of mine is a good (bad) example. She never saw a credit account she couldn't accept as her very own. Looking back, I think it was a sickness.

When we finally split, around 25 years ago, I suddenly had a mailbox full of statements from accounts I didn't even know about. (I was working out of town in those days, and she was able to intercept the mail.) She had gotten major credit cards in my name, and using my credit record, and maxed them. There were also scads of usurious department store accounts, the kind with 28% interest levied monthly. That little gal left with a boatload of $300 dresses and $150 shoes (in 1991), and left me with the statements. Even the divorce court judge agreed and decreed that she had to pay me back on some of the debts. (You won't believe it, but I never got a dime.)

In the end, I found out that she also had a nose-candy problem, and that certainly contributed to the mess. But I've always thought her addiction to spending on credit was at least as powerful as her cocaine habit.

For my part, I had a blonde-candy problem.  :tounge:  Never have quite gotten over that....
Yep, my ex had an issue with money and candy as well, and realizing there wasn't a damned thing I could do to stop her, I let her go and told her, with all sincerity.
Babe, you do whatever you like, and don't let anyone tell you, you're wrong. Yes, I'm evil that way...

Yep, she heeded my words and a few years later, crashed and burned, literally, she wrecked her car while high, so high, she sat in it while it was on fire.
Her sister told me after physical therapy and skin grafting is over in a year, she is taking a new path.

I know the bitch too well, she'll never change. Some people are born sociopaths.
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Offline TboneAgain

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Re: Is This Worth Looking Into?
« Reply #12 on: March 09, 2015, 07:51:52 PM »
Yep, my ex had an issue with money and candy as well, and realizing there wasn't a damned thing I could do to stop her, I let her go and told her, with all sincerity.
Babe, you do whatever you like, and don't let anyone tell you, you're wrong. Yes, I'm evil that way...

Yep, she heeded my words and a few years later, crashed and burned, literally, she wrecked her car while high, so high, she sat in it while it was on fire.
Her sister told me after physical therapy and skin grafting is over in a year, she is taking a new path.

I know the bitch too well, she'll never change. Some people are born sociopaths.

Well, now, sometimes people can change. I didn't mean to testify to a closed case, necessarily....

My little gal slummed around the Cincinnati area for a while before she went to south Florida. She got clean, got a good job (RN), and got older and rounder, sorta plump. A few years ago she got hooked up with another Ohio boy (a good bit larger than me) and they settled back in OH and appear to be happy together, in their roly-poliness. I haven't spoken to her since 1991, and I'm OK with that.

Our divorce became final on Adolf Hitler's 103rd birthday. I have spent a lot of (drunken) hours trying to assign some sort of significance to that factoid.
The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people. -- Tenth Amendment to the US Constitution

Government is not reason; it is not eloquent; IT IS FORCE. -- George Washington

Offline Solar

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Re: Is This Worth Looking Into?
« Reply #13 on: March 09, 2015, 08:20:51 PM »
Well, now, sometimes people can change. I didn't mean to testify to a closed case, necessarily....

My little gal slummed around the Cincinnati area for a while before she went to south Florida. She got clean, got a good job (RN), and got older and rounder, sorta plump. A few years ago she got hooked up with another Ohio boy (a good bit larger than me) and they settled back in OH and appear to be happy together, in their roly-poliness. I haven't spoken to her since 1991, and I'm OK with that.

Our divorce became final on Adolf Hitler's 103rd birthday. I have spent a lot of (drunken) hours trying to assign some sort of significance to that factoid.
LOL...Like Hitler, your marriage is just as dead? sorry, couldn't resist. :blushing:

I haven't heard from my ex in well over a decade, though I did hear about the trail of destruction she wrought as she burned every friendship she ever had, most dealt with breaking up marriages, something she was good at.
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Offline taxed

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Re: Is This Worth Looking Into?
« Reply #14 on: March 16, 2015, 04:19:31 PM »
I would highly recommend they not do this.

How much do they owe?

 

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