Reduce debt cost?

I bought a foreclosure to rehab a year ago and timed just right so the market crashed about the time I wanted to sell. So now I get to pay 12% interest on the short term debt for the rehab until market firms to sell. I have it rented. Do you have any ideas how I can refi the house or something in order to reduce my exposure to paying this debt month to month? House worth 160k and I have 35k equity. Not too crazy about paying 5k to refi when I can hold on and sell in six months. But interested in any other suggestions.

Wow, it took almost a full year to rehab a 160k house? Seldom do RE markets “crash” into full out depression mode and return to an active marketplace within 6 months. You could probably sell your property by discounting it more. Of course you’ve been paying a significant amount of holding costs during the rehab so your potential profit has been dwindling for some time now. So to answer your question of how to reduce your debt, you have 3 options. 1: Sell it, 2: Refinance, or 3: Let it go into foreclosure. Since you don’t want to pay 5k to refi, and don’t want to lose the property completely, looks like selling it will have to do, granted; you might have to reduce the price more than 5k.

If rent is covering your expenses (breaking even) I’d just sit tight for 6 months. You’ll be paying 1% interest per month until you sell which is not ridiculously high.

Next time be more prepared…

Look at refinancing through the james b nutter company Not sure if they still offer it but I refinanced my home with no closing costs or junk fees. No money charged what so ever!

Thanks rlack72! That is exactly what I was looking for.