I wanted to discuss an item that keeps coming up in my short sale conversations with homeowners. Basically, if you put up collateral for a loan (your home in the case of a mortgage) you have secured debt. If there is no asset attached to the money that you are borrowing then it is unsecured. In the last few years people had increasing equity in their homes. They also seemed to run up credit card debt at the same time. The prevailing wisdom was to refinance their credit cards (unsecured debt) into a new mortgage (secured debt). While this seemed like a good idea at the time, now two years later there isn't enough equity in the home to pay off the mortgage (secured debt). As we look at the situation, there are people who borrowed money on credit cards and now owe more than their home is worth. In my opinion, unsecured debt is not going to hurt anything other than your credit. When considering refinancing unsecured credit card debt into a secured mortgage, please think twice. Your credit card company can not remove you from your home if you don't have the money to pay, your mortgage company can, because you put your home up as collateral.
For more information on this or any other topic, call Sal Poliandro, Realtor, Marketing Advisor, Short Sale Specialist
ePRO, SRES at 201-259-2187, or visit our website: www.SalAndDawn.com
Sal can be reached by snail mail at RE/MAX Properties 73 East Allendale Road Saddle River, NJ 07458
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