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Advice on $16K in Navy Federal CC debt!


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Hello everyone,

 

Its time to man up and not being too proud to ask for help so thank you again in advance.

 

I have been building my credit since 2015 with an ultimate goal of 1) clearing the baddies (all gone except one late payment in 2016) and 2) buying a house (which I did last year (NOT with Navy Federal) with a very low FIXED Interest rate of 3.25% if you're wondering how low it is :) I said it once and i am saying it again; I could've NOT done that without the help of this Board and the experienced members who walked me thru it all. However, seems like I need your help again with my NFCU CC.

 

I have $16k in CC debt with NFCU and the minimum payment is getting me to 2 place places 1) No where, and 2) to the point where I can't afford it anymore. My NFCU CC APR is 14% which results in roughly $190/month (interest alone). In the year 2019 alone, I paid $2300 (Interest Only).

 

I heard about Settling Credit Card Debt with Navy Federal Credit Union but this option requires you to miss payments in order for you to settle with them which I do NOT want to pursue (I never missed a payment actually since I got their card years ago). also, I read about NFCU financial counseling, where you fill out a Personal Finance Information Sheet and a Financial Counselor contacts you to discuss your option.

 

Now it might sound dumb but hear me out, I can get a loan from my retirement account (max $5,000 with an APR of 6.5%) to pay off SOME of this NFCU CC debt as lump sum and if done this retirement loan monthly payment will be deducted from my paycheck on a payment plan from 1 to 5 years (I choose the term).

 

Can you help me with any of the above options if you think its worth it? Or should I let NFCU go?
 

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Can you do a HELOC?
Probably can but I don't think it's feasible. Current HELOC rates range between 3% and 21%, depending on the borrower's creditworthiness. I don't have perfect credit and I assume will end up with a rate of more than 10%

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36 minutes ago, Mido said:

Probably can but I don't think it's feasible. Current HELOC rates range between 3% and 21%, depending on the borrower's creditworthiness. I don't have perfect credit and I assume will end up with a rate of more than 10%

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At least find out.  

 

I can't imagine ruining my credit for another seven years without exhausting all reasonable options first.

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Actually, do you have any equity?  Looks like 9 months ago you were trying to buy a $390k home with almost nothing down.  We tried to stop you.   
 
 
You're right, I was shopping for a house in 2019 and I asked you guys here about it.
I got the house as FHA loan and put down the minimum 3.5%
I can find out if there is an equity (I said probably not really sure above) because I'm still new at this mortgage and stuff but if there is how should I do that? If not, what would be the next step handling NFCU CC?

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2 hours ago, Mido said:

You're right, I was shopping for a house in 2019 and I asked you guys here about it.
I got the house as FHA loan and put down the minimum 3.5%
I can find out if there is an equity (I said probably not really sure above) because I'm still new at this mortgage and stuff but if there is how should I do that? If not, what would be the next step handling NFCU CC?

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Divide your outstanding loan balance by the current value.  That will give you your current LTV.

 

Some places will lend up to 100% combined LTV*, although 80-90% is more common.

 

Cost goes up with LTV due to higher risk.

 

* (first mortgage loan balance + HELOC line) / value

 

 

PS: This is why I hate low-down payment mortgages.  Besides MIP/PMI, which makes them very expensive, it puts people in a poor liquidity position when something like this arises.  I'm mentioning this mainly to dissuade others.  I feel badly that you're in this spot and I hope we can help you find the way out.  :) 

Edited by cv91915
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The last post in this topic was posted 947 days ago. 

 

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