ASK AN EXPERT: Housing and Credit

News 13, the Morning News and scnow.com are committed to helping you make ends meet. Along those lines, we will be bringing you a regular series of online question and answer chats called Ask An Expert.

This week, we feature Toby Smith, a certified and licensed housing and credit counselor, who will answer questions on credit repair, budgeting, mortgage issues and anything related to financial counseling.

(This chat is no longer active, however we will offer another opportunity to have your questions answered soon.)

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Glenda in Rowland asks ...

In January my credit card company changed the rate to calculate the minimum payment due from 2% to 5%. In addition to the finance charge on the outstanding balance, they also charge $10.00 each month called a "service charge" that they say I owe for internal processing because they changed the rate. This seems unfair. Do I have any recourse?

Sadly the answer is no. Credit card companies seem to be the only entities in the world that can change the rules of the game midstream. You might have some luck with yelling and screaming...but other than canceling the card, which, if you have maintained a good payment history, you can't fight this one...

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Sam in Myrtle Beach asks ...

I'd like to pay off my Mortgage, I have a credit score of 740 and enough available credit with credit card to borrow enough capital @ at low interest rate for an average of 1 yr before the promotion rate expires, here's the plan after using the cards to pay off the mortgage I now how enough equity ($280,000 which is 100% of the equity in the house) to use to pay off the Credit card and Then I will only be paying the prime rate to pay off the equity loan of $96000.00. My reason for doing this is because being retired my wife and I got so hurt with the stock market in our retirement funds. ($275000) we now will run out of money in about a year , My mortgage balance is $96000, Our income with Social Security and part time jobs give us about $3000 a month, plus we receive $2000 a month from our retirement funds that will be depleted in about a month. I am already taking step to cut back on a lot of expense that we feel are not necessities. If you have any other suggestion I would like to hear them, We are both healty enough to still me employed and we are both working part time, We are using cash for all groceries and working to eliminate credit card debt. What do you think of my Idea. Proably a bad one right?

You have asked several well thought out questions! I would like to strongly suggest that you contact a reputable reverse mortgage specialist.
Are you familiar with the program? It is a unique loan that allows a senior homeowner to use the equity in their home to do several of the things you have noted below. Check out the AARP website or any of the major banks -- each now seems to have a section devoted to reverse mortgages. Hope this helps.

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Ronald in Myrtle Beach asks ...

I am with midland national midland national tax deferred, fixed annuity..3 yr first yr 4.70 second and third yr. 3.70 MNL dramatic choice. Is this a good decision right now or should I just stay with banks. Withdrawal penalty for the first year is 9% second year 8% third year 7%.

Great question, but outside of our immediate purview. I am going to strongly encourage you to seek the services of an experienced financial planner. Please get a good referral.

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Edward in Myrtle Beach asks ...

My balance on a car note is about $7345.00. If I offer a settlement amount for it would that affect my credit ratings. Five year term I had for 3 years, late payments maybe 3 times.

I have a concern about this in that you are requesting a change in the original note. Want to encourage you to ask the dealership...or any dealership..Could you pose the question hypothetically? It is possible that the offer would be accepted, but then you could be reported to the bureau as owing money, even though you think you have a settlement in place. Additionally, the late payments have likely already affected the score...recommend that you check your report, if you haven't done so already. You are entitled to one free report per year at annualcreditreport.com.

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Deborah in Hartsville asks ...

How would you go about trying to secure a home loan as well as a loan, to be included with the home loan to pay off some other debts so that you would only have to pay one payment per month?

Let me try to address each one. First the home loan. If your desire is to own a home, you must realistically assess your ability to pay for the home and all the expenses associated with it. It's not just the house - it's the insurance, taxes and everything else. Additionally, can you make a downpayment on the home and critically important is the issue of credit.
Gone are the days when you could get a home with no money down and less than good credit. Have you checked your credit score lately? Before you even consider buying a home, do a budget. Is there money left over at the end of the month or is everything going to pay bills? If so, you may want to rethink and retime a few things.
Now for the second part, there is no loan product available that you get with a home loan to pay off other debts. Some people, who qualify, have secured home equity lines of credit and home equity loans -- after they purchased the home -- and used those to pay other debts. Both of these are wonderful products but are tied to the home, so if you miss payments, your home would be jeopardy.

Deborah -- please don't get into the habit of borrowing your way of out debt...it does not work and always results in heartache.

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Nell is Lake City asks ...

Is this help for people that have houses only or is it for people that have mobile homes also?

The new Making Home Affordable, MHA, plan is for property classified as real estate only. Many mobile homes are titled as property, so no, they would not be eligible for this plan. If you are having trouble, please contact your lender and be candid about the situation. We have found that if folks can come up with at least one payment, sometimes -- sometimes-- the lender is willing to defer or waive one payment. Communication is absolutely the key.

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Gwen in Darlington asks ...

How do I get a free copy of my credit report and credit score?

You are entitled to one, 1, free copy of your credit report per year. Visit www.annualcreditreport.com. At this site, you can get your report from each of the big three bureaus -- transunion, equifax and experian. You will have to purchase the score though, but it will be worth it. Beware of the many free offers -- and make sure that you read the fineprint -- there is usually a cost.

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