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Erick Kern
Erick Kern began working at Gulfstream Financial Services in 1998 as a loan officer. He will be promoted to manager on June 1, 2002. Erick is a long time resident of Wichita. His and his staff's main interest is to provide homeowners with the best possible solution for their needs for a purchase and/or refinance. Gulfstream specializes in providing solutions to a wide range of borrowers' needs. You may e-mail Erick at gulfloans@aol.com or call him at (316) 684-8333.
Banking & Finance
2002-04-01 14:40:00
Credit carded out?
: We are just about 'credit carded out'.  In the past we have rolled balances to new credit cards but aren't getting out of the soup.  Are there other options? 
Erick Kern Question: We are just about 'credit carded out'.  In the past we have rolled balances to new credit cards but aren't getting out of the soup.  Are there other options?  Answer: This is a problem many people deal with. Rolling credit card balances to new credit cards is not always the best solution for getting these debts paid off. Even with lower credit card interest rates, it is often difficult to reduce the outstanding balances and it is hard to determine when your obligation will be paid in full. If you only make the minimum monthly payment these balances can take several years to pay off. If you are able to pay more than the minimum amount required the credit card balances can be paid off much earlier and you will save a lot of interest expense. This takes discipline to accomplish.Another solution to consider, if you have equity in your home, is to refinance your first mortgage and roll the credit card debt into the total loan balance. This would probably lower your total monthly payments and it might allow more of the interest you are paying to be taken as a itemized tax deduction. If you refinance your home mortgage, it is also a good time to consider shortening the term of your existing mortgage. If you currently have a 30 year mortgage, with more than 15 years until payoff, you will save a considerable amount of interest expense by reducing the duration to a 10 or 15 year loan. It is often possible to combine credit card and other debt into a new mortgage, with a shorter term, and still find your new payment to be  the same, or even less, than the total of all your current payments are.You can also consider a second mortgage. This allows you to obtain a fixed interest rate and you can pay an extra amount to reduce the loan balance each month. Because this is an installment rate, you can determine exactly when the debt will be paid off. It is often the case that the payments on a second mortgage will be less than what you are paying on the credit cards so more of the payment will be applied to the outstanding principle balance.You will want to consult with your Certified Public Accountant or other tax advisor on any questions regarding the deductibility of mortgage interest. This is a complicated area in the tax law, so it is prudent to consult with a knowledgeable professional to be sure you handle this correctly.
 
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