My father is in need of cash to pay off various debts and is looking into refinancing his home worth approx 1.5m. He currently owes:
200k - mortage 3% interest.
30k - credit card debts 15% interest.
20k - miscellaneous.
His mortage provider (Scotiabank) is refusing to lend any additional money due to his 590 credit rating. He has a mortager broke "friend" who offered him an hard loan structured as:
300k - 350k.
6% interest for 1 year.
2% fee of total amount (15k to set it up)
Now I don't understand why he needs to refinance his mortgage. Is he not able to take a smaller loan of say 50k and leave our current one intact?
Then how would he pay back his "friend" in the first place? This doesn't make any sense. Is he on disability and unable to work or he just can't find anything? There's something coming in every month or there's no question here. If he has no income at all, he should just file bankruptcy and/or foreclose on the 1.5m house.
Is this for real?
If you have power of attorney, you can cancel his credit cards and tell them all debts will be settled by the estate. They deal with this all of the time. I mean if the accounts are active and you guys are still making payments on them. If so, just stop. That will save you money. I can see taking out a loan to help w mortgage and groceries etc but I agree with you, 300K sounds like too much.
Word to the wise, if he only gets 700/mo pension and has no savings, that won't be enough for a retirement community when the time comes. Best to try to hold onto the house til the very end.
Perhaps it's too much of a short term fix to a long term problem, plus selling houses is like pulling teeth these days, by the time they pay the real estate agent they could be another half million in debt
>tfw just refinanced my car with a credit union and saved $3,000
My thoughts exactly, paying 15k just to pay off some CC debt and have a few thousand as cushion. It seems that he's backed himself into a corner where he has to borrow money to avoid forclosure.