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New Credit Card Minimum Payments
New Credit Card Minimum Payments - Consumers who have just been paying minimum credit card payments should prepare for an increase. The new regulations for the minimum payments are starting to be felt by many consumers. If you are having trouble making your payments you may want to consider consolidating those debts by refinancing your home.

The average American household with one or more credit cards carries a balance of approx. $9500 dollars. An increase to the minimum monthly payment can impact one's budget severely. It is wise to seek advice from a mortgage professional if this is the case.

You should see a signifigant change in your credit score for the positive when you pay your credit cards down with a mortgage refinance.

The new regulations on the minimum credit card payments will have a dramatic affect on many credit card users. People who typically have a payment of around $150, can now expect that payment to be as high as $350.

Interest rates on mortgages are much lower than those on credit cards. The interest on mortgages is also tax deductible which means you save even more when comparing to the interest on credit cards.

Also if you choose to consolidate your bills you typically will have a savings each month and sometimes you can save hundreds of dollars. Now if you take this amount or even a portion of the savings and apply it to the principle of your new loan you can pay that loan down much faster. One extra payment per year can shave almost 10 years off of a 30 year mortgage.

The increase in the credit card minimum payment is generally bad news for consumers who don't own their own homes, however for homeowners this is an excellent reason to take advantage of the power of their home's equity and finally consolidate those high interest rate credit cards and car loans and roll them into a 30 or 40 year mortgage, spreading out the payments at a very low rate of interest by comparison, and reducing the total monthly spend for your family in the process. And you'l be even happier when you speak to your tax professional about how much money this will allow you to potentially deduct on your tax returns!

Keep in mind the new bankruptcy laws that went into effect October 2005. It will be much harder to just file bankruptcy and eliminate credit card debt. Your best alternative to high credit card payments would be to consolidate them into your mortgage.

Credit card payments have been typically between 1.5 - 2% of the balance of the credit card and now the payments are upwards to 4% of the balance of the credit card.

With the minimum payments adjusting how they are its even more reason to consolidate your debt.

The best thing for you to do is ask any credit card company "BEFORE" you apply what their minimum payment is. Some companies are still at the old 2% of the balance. The new law does not require them to charge 4% it only allows them to.

With the increase in credit card payments and many American homeowners starting to feel the "pinch", now is a great time to look into doing a cash out refinance or to look into obtaining a 2nd mortgage or Home Equity Line of Credit. One of the benefits would be that this will help to reduce your overall monthly expenses. Another benefit of consolidating your credit card debt is that most 1st mortgages, 2nd mortgages, and home equity lines of credit give you a grace period of up to 15 days unlike credit cards that will increase your rates if you are even 1 day late with your payments. One more benefit is that the interest on the mortgage may be tax deductible.

Credit card minimum payments have doubled. Now! is a good time to get rid of all that debt email me [email protected] for more information on how I can help you.

Under the pressure of ferderal regulators, banks are starting to announce that they are increasing minimum monthly payments on credit card balances. Obtaining a 2nd mortgage(HELOC, 2nd Trust Deed) can be a valid option to consolidate credit card debt and comes with the added benefit of deducting mortgage interest expenses.

Credit card debts just got harder to deal with. Since the new change in minimum monthly payments went into effect consumers across the board are feeling the pinch. This is one more reason to consolidate and reduce your monthly outgo. Stop paying such high interest rates and free up your cash.

The federal government had nothing but the best of intentions in mind when requiring these new credit card minimun monthly payments. Under the old minimum payment structure, many consumer credit cards with high balances would take 25 years or more to pay off by just making the minimum payment. The amount of interest that the card holder would pay in such a scenario would be astronomical. The one thing the government didn't fully consider is that making such larger monthly payments will prove very difficult, cash flow wise, for many Americans. If you find that making these higher credit card payments is creating cash flow difficulties for your household, speak with me to see if a debt consolidation refinance might make sense for you situation. What you want to avoid at all costs is falling behind on the credit card payments because once behind it becomes very difficult to get current. This will also lower your credit score making refinancing more difficult and expensive. You can see that it is always better to act before the situation gets out of control.

The way things stand now aren't a whole lot different then before. If you charge your credit card and make the minimum payments its just like taking a 20 year loan.

Cant afford minimum credit card payments - If the increased minimum payments on your credit cards are more than you can afford you may consider refinancing. You may be able to refinance and use the cash out of the equity of your home to pay off your credit cards.

Also, with the new bankruptcy laws enacted in October 2005, you may not be able to roll those credit cards into bankruptcy as easily as you could have prior to the new bankruptcy laws. If you have equity in your home, consolidating your bills would be the best way to eliminate debt and get a tax deduction.

Interest rates on mortgages are much lower than those on a credit card. Not only will you save money by paying less interest when you refinance, but the interest on your mortgage is tax deductible, which means even more savings.

With the new regualations credit card minimum payments are increasing 2% of the outstanding balance to 4%. So, your credit card payment just doubled.

The other major advantage when paying credit cards through your mortgage, besides the obvious payment relief, is that you turn non tax deductable interest into interest that is - in most cases - tax deductable.

After you pay off your credit cards it is smart to lower the credit limit or cancel all but two cards. You want to avoid making the same financial mistakes twice.

With the increase in credit card payments and many American homeowners starting to feel the "pinch", now is a great time to look into doing a cash out refinance or to look into obtaining a 2nd mortgage or Home Equity Line of Credit. One of the benefits would be that this will help to reduce your overall monthly expenses. Another benefit of consolidating your credit card debt is that most 1st mortgages, 2nd mortgages, and home equity lines of credit give you a grace period of up to 15 days unlike credit cards that will increase your rates if you are even 1 day late with your payments. One more benefit is that the interest on the mortgage may be tax deductible.

When refinancing and consolidating your credit card debt you typically save money each month which can then be used to pay down your mortgage faster. Just one extra payment per year on your mortgage can shorten your overall mortgage payments by several years in turn saving you thousands of dollars.

Rolling your unsecured debt such as credit cards into a secured debt such as a second mortgage may also have tax ramifications. Ask your mortgage professional or tax professional for more information.

To be inactive on your paying off high credit card debt has many negative financial effects.

Late payment on one credit card effects all - Consumers beware!
Most people know that paying your credit card bill past the due date will effect the interest rate on your card. The more times you pay late the higher your interest rate will climb until it reaches the legal maximum.
But what many consumers are not aware of is that if you have several credit cards that are related to or affiliated with the same parent company, when you are late on a payment to one card it will affect the interest rate on ALL your cards.

If you have a good history of being on time with your payments your credit card company may forgive a single late payment by not reporting it to the Credit Bureaus. This is entirely optional, so don't expect to be forgiven subsequent late payments.

Making late payments on credit cards should be avoided at almost all costs. The mistake many homeowners make is waiting too long after credit card balances get out of hand before taking action. The late payments of course have a very negative effect on the cardholders credit score which could make any future refinance or debt consolidation efforts either more difficult or most costly.

Since the minimum payment on credit cards will rise very shortly, it is important that you read the back page of your bill. This will disclose its late payment policy and the affiliated cards that a late payment will affect.

If you must be late on apayment, don't let it be your mortgage. Next,if you must choose which credit payments to be late on, it is best to have the fewest number of late payments. So, it would be better to be late on a $200 credit card payment than late on two credit card payments totaling $200, such as a $120 payment and a $80 payment.

If you are 30 days late on any payment this will affect your credit score and it can adversely affect the interest rate that you get if you are trying to purchase or refinance.

The payment has to be a full 30 days late. A 30 day late on a consumer debt is damaging to your credit. However a 30 day late on a mortgage payment can be even worse.

Consolidating Credit Card Debt into Your Mortgage - Some financial "gurus" have advised against this because you are turning unsecured debt into secured debt. While this is basically true the fact is that defaulted unsecured debt can be secured against real property very quickly once the debtor is sued for it and a judgment is received.

If you want to see even greater savings on a monthly basis for a fixed period of time, ask us about using a minimum payment option loan to consolidate your debts. This can provide you with enough cash to pay off your debts while actually reducing your housing payment AND all of your monthly payments.

You should remember that the interest you pay with your mortgage is tax deductible, where the credit card's interest payment is not. Consolidating your debt using your equity can save your money even more.

Most financial gurus don't recommend using the equity in your home to pay off unsecured debt because if you do that, you won't need to buy their program. Think about it. They are in business to sell you software, subscriptions to their websites and books. The program they recommend deals with cutting back on spending and devoting yourself to getting out of debt in a long period of time. Sure it will work, but most people don't have the discipline to not have cable, or not go out to eat for 6 years. The one key to getting out of debt is to put yourself in a position where you don't have to use your credit cards. Once you stop spending on credit cards, the best way to pay them off is to consolidate them into the lowest monthly payment possible. From that point you need to take the savings and re-apply it towards your existing debt and your mortgage. If you do this, you could be debt free, including your mortgage, in a little as 5-7 years. I challange any financial guru to find a quicker way to be completely debt free.

Contact Home Jones at 415-617-5448 or [email protected] for a no obligation consultation.

Consolidating credit car debt into your mortgage can save a homeowner hundreds and sometimes even thousands of dollars per month by lowering their total monthly obligations. When you consolidate credit cards into your mortgage you also are able to lower your interest rates on those credit cards which essentially saves you a lot of money but you are able to write off the interest on your tax returns from your mortgage and you can not do this with your credit cards.

If you want to use a refinance loan to consolidate some of your debts, you're going to have to borrow more than the actual amount remaining on the loan that you're refinancing. This additional amount will be used to pay off those debts that are being consolidated and will affect the monthly payment of your refinanced loan. By doing this, however, you can make your finances and outstanding debts much more manageable and will likely become debt-free much faster.

A mortgage agent can help you decide if refinancing credit card debt into a mortgage is your best option. Using financial calculators available, they can compare how long and how much it will cost you to pay off credit card debt using your current monthly payments vs refinancing the debt into a new mortgage. Very often the monthly and lifetime savings is large.

You can consolidate your credit card debt through use of your first mortgage or by obtaining a second mortgage or a home equity line of credit, also known as a HELOC. A HELOC works with the same basic principals of a credit card. It is a revolving account that as you pay the equity line down, you have that money available to you to use again. With a second mortgage you simply have a set term (5 years, 10 years, 15 years, etc...) that you will pay on the loan for and when it is paid off you are relinquished of your obligation to this debt and the account closes. All three (1st mortgage, 2nd mortgage or HELOC) are excellent choices for debt consolidation but you and your mortgager broker will need to figure out which one makes the most sense for your particular situation.

If you have gotten buried in a hole with credit card debt it could be a necessity to refinance your home and pay off your credit card debt. It has been known to save thousands of dollars. On the other side of the spectrum, if you only have 5 months left on a credit card bill it is note wise decision to bury that into a mortgage.

In order to decide if a debt consolidation is your best action, you should figure what you are paying now and how that will translate in the length of time it will take you to pay off those credit cards. You may find that rolling those debts into your mortgage will save you thousands of dollars in interest payments.

Remember not to stop making regular payments towards credit card debts simply because you are in the process of consolidating them. Defaults and late payments can negatively impact your credit and jeopardize the consolidation loan.

If you are planning on selling your home in the near future, you may want to rethink consolidating. You need to make sure that you have enough equity to pay for realtor's commission and down payment or closing costs on the new home.

When deciding to refinance for debt consolidation you might want to consider how long you will have to pay your credit cards if you are only making the monthly minimums. This can take you much longer in most cases than paying on a traditional 30 year fixed mortgage.

Another option if you do not have enough equity in your home to pay off your credit cards is to refinance to a pay option ARM. The money you can save by making minimum payments on your mortgage can be applied to your credit cards to help pay them down quicker.

During most refinances you will be able to skip a month, or two, of your mortgage payment. It would be a good idea to take some, or all, of that payment and apply it to your credit card debt.

Remember, you have a three (business) day right of recission before you can receive the cash from your refinance.

If your decide to consolidate credit card debt in the state of Texas you must wait 12 days from the time of application to close on your cash out loan, also Texas Cash-Out loans are limited to an 80% LTV (Loan to Value). This law only applies to homestead properties and it may be different if the property is a second home or investment property.

If you refinance to pay off credit cards it is wise to have the limits on the credit cards lowered to avoid the same situation you are refinancing out of. Unless you have many cards open avoid closing the accounts. If they have been open for a long time closing them could negatively impact your credit.

If you are paying the minimum payment on your maxed out credit cards every month, it could take 15 to 22 years to pay off those cards.
Consolidating credit cards with higher rates, such as 16%, 18% or 21%, into your refinanced mortgage with a rate of, say 6.25%, you could dramatically decrease your total monthly payments.
The money you save every month could be used to pay off other credit cards or other loans quicker.
At that point, the extra money you have every month could be paid to reduce the principal on your mortgage or you could refinance into a shorter term loan, say 15 years, at a lower rate and pay off your home much quicker.


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