I have about $80k in debt and need help figuring out the best way to dig out! We are soon to be a family of 4, and I'm really focused on getting out of this hole!
Background, and income: It all began when I couldn't pay my taxes after the real estate crash in 2007. Interest and fees mounted, and I didn't have steady income for quite a few years. Fast forward to now, and I'm showing 3 years of steady W2 income of $110k, $120k, and now $127k. We have a side business that brings in about $20k as well.
House When we moved to our current city 1.5 years ago, rent was astronomically high. For just about $500 more per month, we could buy a much nicer house and see the benefits of appreciation and tax write offs, etc. So we purchased a house for $420k with $20k cobbled together from job signing bonus and any other place I could source money. 1.5 years later, the house is worth about $460, and our loan balance is $390k at 3.6% interest. Our original payment was supposed to be $2800/mo. (For comparison, a much lower quality rental would have been about $2200/mo. The minimum quality and size we might settle for a rental.) Here's the kicker: I recently got a letter from Wells Fargo stating that the initial taxes were never collected due to a mistake by the title agency, and also our house was re-assessed by the city so our taxes have gone up. In order to make up the escrow shortfall, Wells is raising our monthly payment to $3400/mo for the next 12 months. :| This leaves about $3k for us to live on per month, as well as pay down our debts. This doesn't include about $2500 per month we're withholding for taxes.
Credit Card and Personal Loan Debts We currently have 6 credit cards with a total of $51k on them. I have $18k in the bank to pay down the highest interest ones now, leaving about $33k in credit card debt.
When we bought the house, we put my tax debt into personal loans held by USAA. $13k is secured by our car at 5% interest, and $16k is unsecured at 13% interest. The payments are $270 and $400/mo respectively.
Options *We're currently paying about $600/mo in card interest, so I'm exploring a balance transfer of $5k at 0% for 12 mo with a 2% fee with an existing card, and opening a new card in my wife's name to transfer $20k at 0% for 18 mo with a 3% fee. This makes $700 in fees to move $25k to interest free cards for more than a year. This would leave about $8k on current cards at 16% apr. * Personal loan: should I consider another personal loan? * Selling things: I'm selling all sorts of stuff and could probably make about $10-15k in the next month to pay down cards.
My current credit rating is ~720. What do you suggest I do? Right now I'm looking at doing the card balance transfers, selling a bunch of my shit, and living as lean as possible to pay the cards down as fast as possible and close them out as they are paid down. Thank you so much for your help!
Submitted November 13, 2017 at 01:57PM by bikeveloce http://ift.tt/2yzLm8X
