Can anyone offer some financial advice regarding a second loan?

September 10, 2024 5:46 AM

Hi all, I'm in a kind of a tough spot... I took out a $50k home equity loan against my primary (H1) residence 3 years ago at 3.99% (balance on it is now $35k). I now have a different primary (H2) and currently rent H1. Due to cc debt I am looking at options for a 2nd loan. Ideally I'd like to pay off first loan and all cc debt and have one new monthly loan payment. I have listed H1 for sale to try to convert to cash equity to pay off cc debt but H1 is not selling. I know most banks won't allow for loan in 2nd lien position. And I know any loan I take out I'll lose the 3.99 rate and have a higher rate (which I'm OK with - I just don't want to continue to carry the cc debt). Are there any banks that will offer an option for me? I am gainfully employed and credit is in good standing. Any suggestions here are much appreciated :)
posted by matt755811 to Work & Money (4 answers total)

Do you own H2 and have any equity in that?

Do you have a 401k you could take a loan from? There are a lot of rules and numbers to consider here but it is possible.

Could you take a personal loan at less than the combined interest of the various credit cards?

Finally, if you just want to simplify, could you open a checking account and simply automate having X amount of your paycheck deposited into that account and then paid to your various credit cards?
posted by chesty_a_arthur at 5:53 AM on September 10

Could you refinance all of the debt on H1 with a new mortgage on H1? That would knock out the home equity line. Depending on the equity in H1, you might even be able to get some cash out in the refinance to pay the CC.
posted by Mid at 6:31 AM on September 10

I don't think this is as complicated as you think, and you're probably better sitting down with a banker with wherever you got the 3.99% loan from and lay out your debt reorganization plan -- If you've got a good credit rating and there's enough equity in the home, banks will do almost whatever they want to get you to pay them monthly for your debt than anyone else.
posted by AzraelBrown at 7:51 AM on September 10

How much cc debt are we talking here?
posted by flabdablet at 9:50 AM on September 10