Debt Management

If you inherit a house with a mortgage you may wonder if it fortune smiling on your or a curse.

In most cases, your loved one left you a valuable asset.

Can you or should you pay your mortgage on a credit card? If you have high rewards point or a big signup bonus, then maybe.

Banks make it difficult because they don’t want people paying one debt with more debt.

If you want to pay this way because you are behind, then you should get financial counseling instead.

What happens in debt management is a consultant helps you pay off your unsecured balances over a 3 – 5 year period.

Eligibility for these programs usually depends on the type of debt and your income.

You can do it yourself, but you do need planning and discipline to be successful.

Are you responsible for your spouse’s medical debt? Maybe if you live in a community property state or a doctrine of necessaries jurisdiction.

You also are if you co-signed for the treatment.

Your aren’t, though, for obligations taken on before marriage or after divorce.

If you take money out of your retirement accounts to pay debt you pay fees and taxes. Each type has its own exceptions for different hardships.

Only use retirement savings if its a dire emergency, though. You limit compounding and take away your retirement funds.

What happens to debt when you die? The estate pays unsecured, like credit cards and medical bills, until it runs out of money.

Secured, like mortgages and car loans stay with the property.

Life insurance and retirement accounts go directly to the beneficiary.

How should you leave your property to your loved ones? Should you use a simple will or a trust?

Wills are easy to set up but go through probate.

Revocable or irrevocable trusts are harder to set up but shelter your assets from taxes and creditors.

There are four primary ways to pull cash out of your house. You can refinance, get a second mortgage, get a home equity loan, or get a HELOC.

You should carefully consider your reasons for wanting to cash out on your home. Will it increase your property’s value, decrease interest or the payment schedule; or will it improve your financial decision by paying off high-interest debts?

If it doesn’t do any of those things, you should ask yourself if you really need to do it.

Mortgage accelerators pay off your mortgage faster using HELOCs. The advantage is that they do work. the disadvantage is that they come with high fees.

While these programs work, banks sell them because they make more money on the fees associated with them. The good news is that you can set up your own accelerator and save the feels your lender will charge.