My wife and I were going to try and refinance our mortgage as our interest rate is 6.25% and the rate had dropped more than a percent. This was the bank’s idea, they actually called us and wanted to set up a meeting. When we got there we went over some ways we could save money, but they wouldn’t allow the the refinancing because my wife’s credit score was too low.
My friend suggested a home equity loan which is, from what I understand, is a loan based off how much non-interest money you’ve paid on the loan. As you can tell I’m not 100% on this.
We took out a loan for about 0,000 and the last value of the house was at about 5,000. The catch here is that I’ve only owned my house for about 3 years so I’ve only actually paid like ,000 on the principle. I’ve never missed a payment, or asked for an extension; and I usually pay more than the amount they ask for.
My plan, if possible, would be to get about 00-00 to pay off some bills, mostly medical. It seems when you go to the hospital these days you get a bill from the hospital, the doctor, the assistant, and pretty much anyone you talk to. The bills aren’t that much in total, but each one wants you to pay a certain amount which is annoying. I’m hoping paying these and clearing any credit card debt will raise us enough to get approval for refinancing.
I do plan on talking with the bank, but I like to come here first just to get a better idea of things.
Thanks in advance.
Note: I am on a fixed rate, I will never go to variable. Also we plan on living here the rest of our lives. We both have very good, very steady work in healthcare.
The idea is once these misc. bills that I pay 0 or so a month to are gone, that money could be slapped back on the monthly mortgage over-payment. I usually paid several hundred over but as the number of the number of these little bills increased, it took away from that and I’m pretty much not paying any extra.
401K is out, as this is my first job that offered it and I have next to nothing. We are a young couple, both mid-20s.

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