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Financing -- Loans/Loan consolidation

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Question
Mr. Pechony,
Thank you for your time.  I have some questions about loan consolidation.  When is it a good choice?  What general fees are required?  My husband and I have some credit card debit that we are passionate to pay off.  Due to an illness that took us off guard, we procured more credit card debit and we are unable to save any money trying to pay them off.  Also, we have been paying a mortgage on a house for 12 years with an interest rate of 6.050%.  Is refinancing our home a potential option to get some money to pay these bills off?  Thank you so much.

Answer
Hi Tanya,

While I am not a residential mortgage professional, I can offer some pointers that will hopefully be useful. Even with the recent equity erosion in the housing market, you may still have significant equity built(over 65% LTV)in your property and should be able to 1. Pay off some or all of your credit card debt and  2. Possibly get a lower interest rate.  It is definitely an option, however there are other factors that will affect your eligibility such as current FICO credit scores, income, and other installment debt.  

Most bulge bracket banks offer great programs and if they cannot offer you the terms you could try an established mortgage broker that have access to a variety of programs that may be less restrictive and help you reach your funding goal.

What you should avoid is doing debt consolidation through a debt consolidation agency as in most cases it will negatively effect your personal credit as debt consolidation firms buy your debt for less than you owe and your credit report will state" paid in less than full".  You may also lose credit score points because not all credit cards may get paid off on time and you may have end up having late payments posted or worse. In short - it should be avoided at all if possible no matter how sweet the sales pitch may sound.  

Good luck and just make sure you check with BBB and conduct proper due diligence.

Hope this was helpful
Regards,
Mike

Financing -- Loans

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Michael Pechony

Expertise

Commercial loans through Banks, Fannie Mae, Freddie Mac, USDA, SBA, HUD, Life Companies, CMBS, Private Lenders, Specialty Lenders. I would be glad to answer questions about acquisition or refinance of a business, equipment financing, obtaining a line of credit, bridge and permanent financing for investment property such as multifamily, mixed use, owner occupied, student housing, hospitality, NNN, and retail

Experience

Principal at Anchor and Anvil, a boutique commercial financing firm. Previously: Senior Vice President of American Street Capital - commercial real estate financing firm. Managing Partner at Investment Street Capital - business financing firm.

Organizations
AUCCI

Education/Credentials
Northeastern Illinois University

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