Should You Consolidate by Refinancing or Get a Second Job?

Recently I heard a respected finance advisor to advise a caller on a TV show with this question ...

"We have over 20,000 dollars in debt, and with a minimum credit limit up, I fear that we are not able to treat even the minimum payments. I have a mortgage company about refinancing my mortgage and consolidate my debt into a spoken payment, we can manage. What should we do? "

The answer was ... "Thnot refinance your home! Why would you do that? Why risk at home, by adding other debts? I want you to go and get a second job and work hard to pay them. "

I could not believe that this advice! Basically, poor caller said was going to take time away from family and working a second job (probably around $ 7-8 per hour pay off) on the extra debt. Forget the impact on privacy of the caller and the stress, we look at the financial realityhere.

A second place at even an aggressive price of $ 10 per hour on average only 10-20 hours per week. Say $ 200 before taxes, approximately $ 150 after taxes. Take the increased expenditure has occurred (gas, vehicle wear and tear, etc.) and include approximately $ 100 per week to take on the debts. Again, we will (forget the whole compound interest on the credit card as if the credit card company would do!) At $ 100 per week, would that $ 20,000 paid out in more than 200 weeks long.That is almost 4 years of work per week. (Now add back the interest, and how long would it take?)

Wow .. not so bad, right? Where can I sign up?

What is the refinancing of the home and paying off that debt. Well, the same caller said they could save about $ 450 per month over the current set up to. Well, if the caller would still pay the monthly amount they were always on, they get the additional $ 100 per week and not get a second job. Additionpay the tax benefits from the interest on a mortgage, and go the better way is to?

Frankly, I think the advice was wrong. My advice? Not call into a so-called experts and ask for financial advice. Get advice from a professional that can sit with you and take the time to give you good advice tailored to your needs and goals .. not a talk show on the agenda!

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