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HomeBlog BlogHow Your House Could Buy You A New Car
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How Your House Could Buy You A New Car

February 22, 2013 by National Debt Relief

House and calculator and credit scoreIf you play your cards right, your house could buy you a new car, vacation home or pay off all your debts. You might be able to do this by refinancing your home, by getting a homeowner’s equity line of credit (HELOC) or by taking out a second mortgage. So, which might make the most sense for you?

The pros and cons of a refi

The upside of a refi is that you should end up with a much lower payment then you now have. The downside is that you’ll have a whole new mortgage for a new fifteen or thirty years. However, it should come with a much lower interest rate. For example, if you took out a conventional 30-year mortgage credit 12 years ago, you’re probably paying at least 5%. APR. in comparison, you should be able to get a new mortgage today at 3.5% or better. If you think you’ll be in your house for less than five years, you could choose five-year ARM (adjustable rate mortgage) and save even more.

A HELOC is very flexible

In comparison, with a HELOC, you don’t take the whole amount all at once. It’s a line of credit where you take advances. HELOCs typically have a fixed rate for all the advances taken within the first 30 days. Its monthly payment is usually 1% of your outstanding balance and its term will be 15 years. These years will be split as follows – a 5-year advance period (when you can take cash advances) and then a 10-year amortized repayment period.

A second mortgage

A second mortgage is much like a refi in that you get all the money upfront and then have a fixed number of years to pay it back, which is typically seven or 10. Of course, if you sell the home before you pay off that second mortgage, you will have to pay back that money as well as whatever you owe on your first mortgage.

The difference in interest rates

As of this writing, it was possible to get a thirty-year fixed refi with an interest rate as low as 3.343% or a 15-year fixed refi for 2.75% – both with zero points.

In comparison, a 5-year HELOC would have an APR of around 3.99% (from a credit union where we live). And you might be able to get a second mortgage with an interest rate as low as 2.375%.

Pay off your debts

Whether you choose a refi, a second or a HELOC one of the best things you can do with the money is pay off your debts, especially if you’re carrying a lot of credit card debt. This generally makes good sense for two reasons. First, you will have a much lower interest rate as your credit cards may have interest rates as high as 50% to 20%, while as you have seen, you could get a second mortgage or a HELOC with an interest rate of less than 3%. And second, you should have much lower monthly payments, as you will have many more years to pay back the loan.

If you have don’t have enough equity

If you’ve been in your home for less than 10 years, you may not have any equity. This is because during those first 10 years, most of your monthly payments are used to pay interest and not to reduce your balance. In this case, you may want to contact us. We’ve helped our clients consolidate their debts and save thousands of dollars in the process. We usually help them become debt free in 24 to 48 months and with a payment plan they can afford. Contact us today for more information on debt consolidation through debt settlement.

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National Debt Relief

National Debt Relief is one of the largest and best-rated debt settlement companies in the country. In addition to providing excellent, 5-star services to our clients, we also focus on educating consumers across America on how to best manage their money. Our posts cover topics around personal finance, saving tips, and much more. We’ve served thousands of clients, settled over $1 billion in consumer debt, and our services have been featured on sites like NerdWallet, Mashable, HuffPost, and Glamour.

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"When I first decided to go with National Debt Relief and I..."

Moderate National Debt Relief Caller: Charlotte Transcribed WE 1/17/2021 Charlotte: Our call may be recorded. What actually made you decide to work with our National Debt Relief as opposed to other providers? GLYNN: Well, when I first decided to go with them and I talked with the representative, I got a favorable impression of him. And since we've gone with him, we've had very good experience with them. Charlotte: Can you tell me about the program that our National Debt Relief signed you up for? GLYNN: It's a debt consolidation program. Took our credit cards and then working to pay them off. So far, they paid one of my wife's off and one from me. Took the harassing phone calls that we were getting and got them to stop and got creditors to wait on their payments so we could get money to pay them. Charlotte: What did you think about the enrollment process you went through? GLYNN: Enrollment process? Well, it was, I guess... Charlotte: Like how easy or difficult did you find the enrollment process to be? GLYNN: It was no [unclear 0:02:52], just what we could do, and looking at our financial situation, what we was able to do. It's just that, mainly, I was the point where I was fixing to go bankrupt and I didn't want to do that. And this was a way to, I guess, not to go bankrupt. But it still left that option open. Charlotte: In what ways would you say that this program has worked for you? GLYNN: Well, I guess the biggest thing is it stopped the harassing phone calls that we have been getting sometimes five or six times from the same creditor a day. It gave us an opportunity of being able to, I guess, set up a fund that we can use to eventually pay off our credit cards and our debts. Charlotte: About how far would you say that you were in at this point? GLYNN: At the time we signed up? Charlotte: At this point right now. About how far are you in the program? GLYNN: Well, it's, [0:05:00] I guess, about -- I would say I think I was like nine months. And like I say, they were able to pay off one of my wife's credit cards and are working on another one and was able to pay off one of my credit cards, and hopefully be able to pay off another one. Charlotte: Walk me through the interaction with your National Debt Relief negotiator. Give me a little insight on what that experience was like with that representative. GLYNN: Well, he helped us go through and get signed up on a program. He helped us with the getting, I guess, a financial report to establish a savings account to be able to use to start paying our debts off. We didn't know what to do or how to go about doing it. Charlotte: Is there anything about your National Debt Relief negotiator that really stood out and impressed you at all? GLYNN: Yeah, his manner and I guess he was polite and he didn't put down on us. And he led us and showed us the direction we need to go. Charlotte: Is there anything about this process that you would have liked to have seen handled differently? GLYNN: No, not really. Charlotte: If you had to rate this experience on a scale of one to five, and five is that you would recommend to friends and one is you were pretty dissatisfied, how would you rate it? GLYNN: I would rate it at a 5. Charlotte: Would it be okay if I posted your comments as a review on our public website for National Debt Relief? They just like to know what their customers felt about... GLYNN: If you think they're good enough to post. [chuckles] Charlotte: I will send over a link so that you can have it as a record for yourself also at glynncoates@gmail.com. How would you say that your life has been impacted by working with National Debt Relief? GLYNN: Well, it's taken off a lot of the burden off that we were under. We was to the point of, "Just go ahead," and getting a lawyer to file bankruptcy. But this has given us an opportunity to pay some of our debtors back. We made the debts under good face and circumstances beyond our control, it got out of hand. And so, we were trying to -- we wanted to pay them back, [0:10:00] or as much as we can so that, I guess, more ease in our minds. Charlotte: If a friend or a family member were asking you about National Debt Relief, what would you tell them? GLYNN: I'd tell them if they was needing, that they were good to work with and they continued to try to help and work with us. Charlotte: Our call is recorded.

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