Refinance to pay off credit card debt - what's the best option?

[Michelle Burgstaler]

I’m hoping someone can give me some sound advice. I have $24m in credit card debt, my husband has $0. I am trying to figure out the best option for eliminating the CC debt, plus having a little left over to help our son with college expenses. Husband’s credit score is around 740, and mine has recently tanked to about 550. I make about $16m/year, he grosses about $70m (rental income).

We own 9 rental homes; 6 are mortgage-free and 3 have 30-year mortgages, $50m (4.75%), $67m and $63m (both at 4%). We are 6 years into these mortgages at $1,050/month. The rentals are worth $100-135m each. Our home is probably at $230m, mortgage-free. We are 56 years old and don’t want to sell the rental properties yet.

Would it be best to refinance one of the mortgaged rental homes? (15 year at 4.175% with $4700 closing costs is an offer we received on the rental we owe $50m on.) Or take out a mortgage on one of the mortgage-free rentals? Or should we take out a mortgage on our residence instead?

My husband is strongly against mortgaging our residence. But I'd like to be able to convince him that's the smartest option, if, indeed, it is? For example, get a 15yr mortgage on our residence, pay off 2 rental mortgages, pay off the CC debt and have enough left over to pay down on the remaining rental mortgage and help our son? I don’t know enough to know what the best option is and I don’t know who to turn to for advice; a banker, a financial advisor, a lawyer??? Any advice is greatly appreciated!

[Steve Vaughan]

Originally posted by @Jay Hinrichs:

Wow I am impressed that took guts..

I would do the @Steve Vaughan SOPs for how to dig out he has the absolute best advice on this site for these situations.

you can do it..  I suspect he would say get rid of all your CC cards.. and then what ever income you have start paying them down.. for me I would concentrate on paying minimum on all but one knock out one then go to the next one..

 Thank you for the mention, Jay.  You are too kind. 

Michelle, the first step to tackling a problem is to recognize there is a problem.  That took a lot of guts and I want to commend you on having 7 months clean.  That's huge.  No plan will work of course if the big G is not corralled. I hope you are in a good GA group and have a sponsor.

I wouldn't refinance a house. That will only cure a symptom, not the behavior or underlying problem.  This needs to be felt by sacrificing and paying off one debt at a time, lowest balance to highest.  I paid off $87k this way in 32 months earning basically nothing.   I had a big debt thermometer I drew on poster board and was motivated as debts fell off and I could cross off some of the thermometer. 

I'd encourage you to follow Dave Ramsey's radio show/podcast, his FB group and to read his Total Money Makeover.  He is the king of getting out of debt.  He also has a free budgeting app called Every Dollar.

Cut the credit cards up.  I haven't had cards or consumer debt of any kind (just mortgages) in years and my score is very high.  Trying to manage your fico is just chasing your tail at this point anyway. 

Welcome to BP.  Thank you for sharing. We are here for you.