In we took out a 2nd mortgage on our home for $19,200 to pay off a load of credit card bills. They did NOT offer a Home Equity Line of credit (HELOC) versus a traditional fixed Home Loan, they just slapped us with a HELOC. Its three years later and after making 39 payments (totaling $11,700) our outstanding balance is $21,700!!! That's $2500 MORE that the loan originated at!!!
When I finally came to my senses and called them to ask WHY, after three years, the balance has not only NOT gone down one-single-cent, but in fact went UP over two thousand dollars, they could offer no reasonable excuse. The loan officer that had worked with us from the beginning hemmed and hawed about it, sputtering out factoids about "interest rates" and "variables" and "minimum payments" etc etc but never stated exactly why. He then proceeded to try to talk me into getting ANOTHER loan to pay off THAT loan and this time have a fixed payment and terms. I told him he must be crazy.
We got this 2nd mortgage to get us OUT of debt, and he knew that... instead, after three years, we are over $2500 in MORE debt, and that doesn't include the $11,700 that we may have well just flushed down the toilet.
Thank God we have just refinanced with a REAL bank and paid them off altogether at a much lower interest rate. BEWARE!!! Household Finance PREYS on those with "less than perfect" credit and those who are desperate to find a way out of debt. All the while, you are only digging yourself in further when you sign a loan with HFC.
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