Best Mortgage Advice Equity Loans
by Elois from Leesburg, FL., USA
Regarding Best Mortgage Advice About Equity Loans: One reader's best mortgage advice regarding 2nd mortgages and her downward spiral, financially and emotionally, with an equity loan, Kate
Hi Kate, In 1999 we purchased a 3 bedroom, 2 baths home in a nice community near Leesburg, Fl. The house was brand new and had been used as a model.
The original purchase price was $86,000. It was the average selling price for houses in the area at the time. Within 6 months of our purchase, we decided to add a built in pool with screen cage. That added a whooping $24,000 to the total cost of the house. Now we are talking $110,000.
Unfortunately my husband had some problems with his job and we had to cut down on a lot of little extras here and there and then lightning struck, so to speak. Somebody told my hubby (their best mortgage advice) to get an equity line of credit because our house had increased in value. Remember that in 2003-2004 the values of houses increased dramatically, especially in our area.
So, we took out a line of credit for $25,000. Instead of paying off our credit card debts, or at least one of our two cars, my husband decided to take a trip abroad that consumed most of the money. Now we still had the debts we had before plus the extra money for the loan we had obtained.
Shortly after this, to add to our nightmare, my husband suffered a heart attack and was unable to work. Only about a year had passed since we had obtained the equity loan on our house but, you must do what you have to do, and we decided to try to get some additional money based on the 2005 housing market that was still booming.
Sure enough, we were able to get an additional line of credit for approximately $30,000. To make along story short, our payments ballooned to a whooping $2500 a month for our mortgage.
We had paid down some of the credit cards, but still had the two car payments, plus all the medical bills that continue to come in day after day. My husband had been in the hospital for 10 days and the bill was over 150,000!
I was desperate. I got another job at night to help get out of the monthly bills, but it did not pay much and it was only a drop in the bucket.
Then the housing market started to collapse, by the end of 2007 we were over $400,000 in debt, my husband was only able to work part time and I no longer had my day job, as they had laid me off a few months before.
With my night job paying me $6.00 an hour but working only about 25 hours a week it hardly put a dent on our monthly bills. We were not able to pay our mortgage. The mortgage company did not want to work with us and in a few months we were faced with foreclosure.
We are now out of the house and living with my family.
This is my story and my best mortgage advice
to anyone who owns a home and is able to meet their mortgage payments without a hassle every month: don't ever, ever, ever, get an equity loan if you can help it.
Hence the title of my article because an equity loan on your home can kill you financially and emotionally. Elois
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