"I just wonder why at this point a couple of degrees makes a difference.........LOL>" I think it is because of the rule of thumb. You know, the one that says you need another hot toddy for every five degrees colder it gets. ;)

I have a girlfriend who is a real estate agent. She told us that refinancing is basically a scam because there are so many fees involved. We were trying to decide whether to continue investing in mutual funds in this iffy market or pay off the mortgage, so we saw our financial advisor in January. He said that since the market is just as likely to go down as to go up, we would be safer paying off the mortgage, but if we buy mutual funds, we are buying at a low price, which is a good thing. So we are doing 50 -50, investing and paying down the mortgage. It feels SO good to be paying off the mortgage. Will be done in two years or less, and we brought the house in 1992. (Didn't start adding to the principal until two years ago.) I would not take cash out, nor would I refinance. The whole point is to pay off the mortgage, not make it last forever. Taking money out to invest might have made sense in the 90s when the market was booming, but not now. Everyone should manage their finances as if they might lose their job next month. I have NEVER made car payments, so I agree with landmarker, you should have been saving for a new/replacement car. If you don't have the ready cash to buy a new car, I agree that you should buy a used car. You obviously know enough about cars (Congratulations!) to be able to pick a good one. Buy a used car, pay it down as fast as you can, then go back to paying down your mortgage principal but also save for the next replacement car. You know what they say - the value of a new car drops as soon as you drive it off the lot.

If you wanted to refi the entire amount, (325+42), that puts you at about 81% LTV. But, that's based on the assessment, not one an appraiser would give you. And, that doesn't include closing costs. So, while that's probably a good estimate, I'd find out what homes in your neighborhood are selling for. Foreclosures have killed so many refi's no matter what credit rating people have. It's sad but true. And, if you do have to end up with a full refi, you don't want to get stuck needing a few thousand dollars. I do think your best bet is to get the modification done first and hope you don't have to do the full refi. Once that's resolved, then you can get rid of those credit cards :) Good luck!

What did she "pay" ... well, "agree to pay" for her new car when she bought it two years ago? And how much has she paid over all of those months between then and now? And how much does she still owe? If she goes to buy a new one, how much will the dealer allow her as trade-in on her current car (with the less-than-attractive side) as reduction in price of the new one? She'll be astonished at the amount that the dealer will allow her as trade-in on her car with the caved-in side when she goes to buy her new car. I'll bet that it'll be less than she still owes, probably quite a bit less. So that, if the new car's price may be, say, $18,000. ... ... she may end up owing something like $22,000. on her new loan. On the new car that she paid $18,000. for ... ... but now, even if only a week after she bought it, and without a mark on it, would be worth probably about $14,000. Two thirds of what she owes? Not my idea of a good time! Would she listen if you drew a set of patterns for her, showing (with approximate sizes relative to dollar amounts), of what she paid for her current car, how much she's paid over the 24 months, how much she still owes, how much difference there is between her cost, what she's paid, what it's "worth" now as allowance toward an upgrade, etc. And showing how she's paying so much monthly on her student loan, so much monthly on her car loan, splitting those two payments into principal repayment and interest components, running the interest stream off the edge of the paper, as lost. So - she's working about half of her time monthly for ... ... nothing. But - currently, she's not working, is she? So how does she make car payments? How long before they may repossess it ... ... leaving her walking. Which wouldn't happen if the loan was all liquidated. Working much of her time - to pay someone else rent for the use of their money. And as long as she uses other folks' money ... she'll have to pay rent on it. Which is money that could have stayed in her pocket, had she driven the nearly new car (with the stove-in side) longer ... ... until she's paid off all of the money that she'd borrowed to buy it. Which would mean that the amount that she would be allowed at trade-in would be all hers, instead of mostly (or all - or maybe even more than all) going to pay off the loan that she still owes on the current car. Which would mean that the amount that she would have to borrow on the new car would be much lower. So - if she were paying the same amount per month ... the loan would be paid off in short order. Then she could keep putting that amount away (or most of it) to pay off her student loan faster. Could you draw comparable sized boxes to the amount of value that each item is, with labels, and the proportion of it that's hers, etc.? When we get stuck in a snow bank, we can do a lot of spinning wheels back and forth, with little result. Except burning a lot of gas. Wear and tear on tires. Wasting time. And, if we're not careful, when using an automatic transmission, burning up the transmission. And getting where? Nowhere! And getting not just ourselves, but people sitting in the car with us, more than likely, somewhat bent out of shape with irritability. Smells a lot like this situation, doesn't it? Just some thoughts. Or ... would you call it my whine? ole joyful