Why Former CEO of First Franklin Says the Vanishing Subprime is a Shame FinCri Advisor (subscription)
One of the innocent victims of the financial crisis may surprise you: The subprime lending industry. Or so says a former subprime CEO. Irresponsible choices by the government and GSEs - not just the go-go subprime market - have paralyzed the American dream, he says. Newly revealed problems with FHA only add to the angst.
"It's gotten to the point where the word ‘mortgage' has a negative stigma," says Andrew Pollock, former CEO of prominent subprime lender First Franklin, which was once part of Nat City and Merrill Lynch. "A majority of subprime loans were common sense lending and investment quality that allowed the dream of home ownership to come true. Now subprime has a stink thrown on it, like kryptonite has been rubbed all over it."
Contrary to popular belief, subprime loans were not contrivances created in a rush for profit before the housing bubble burst, says Pollock, now managing partner at Global Logic Advisors, a management consulting firm based in Redwood City, Calif. They have been viable products for decades, dating at least to the 1944 GI Bill that provided low-interest, zero-down payment loans to veterans.
VA Cash Out Refinance to 100 Percent
The ability to access 100 percent of your home's equity is a new benefit for Veterans. It comes as a result of the Veterans' Benefits Improvement Act of 2008. Previously, a cash out VA refinance mortgage was limited to 90 percent of your home's equity. This mortgage is allowable for Veterans and Military Spouses who are currently in a conventional home loan and wish to access 100% of their home's equity.
Q: Who is eligible for a VA 100 percent Cash Out Refinance?
A: Veterans and Military Spouses who are currently in a conventional or subprime mortgage
Q: What is the purpose of a VA 100 percent Cash Out Refinance?
A: To enable Veterans and Military Spouses the ability to access 100% of their home's equity. To obtain low fixed rate financing and refinance out of a subprime loan to a safer, more affordable home loan
Refinance Help. Fill this form and get help!
Can you refinance 100% loan-to-value in Texas, and cash out on the equity for home improvements?
Meaning, we owe $99K, can we refinance for $125K?
(to Amanda: 100% loan to value means getting a loan for 100% of the home's value. Just because you owe on a home doesn't mean you owe 100% of what it's worth.)
EDIT: If you really want to get technical Amanda, there is no "a" before 100%. So, it's clarified just fine. You read it wrong. No, I didn't ask if you could refinance a loan that is 100% of the value of my home. Go back and read again.
Texas state law says that the only way you can do a 100% on the first refinance after the purchase but the only way to do that is if you still owe 100% of what the house is worth because you can't get cash out. If you wanted to do cash out you could but you would not be able to go above 80% loan to value due to Texas state law.
EDITED TO ADD:
And I know what 100% Lown to value is. You said, "Can you refinance a 100% loan to value...." Which means that you have a 100% LTV that you want to refinance. So perhaps you need to be more clear if you expect a correct answer.
Yes, you can refinance from 90K to 125K if the home is valued at 125K, but your interest rate may be higher due to the risk and you may end up with PMI, which you probably dont have now. Just some things to consider.
www.totaldebtsolutionsllc.com
Loan officers in our network do loans in Texas all the time.
I refinance my mortgage and cash out $150,000. Is it true that I only can deduct my interest up to $100,000?
http://www.irs.gov/pub/irs-pdf/p936.pdf
This advice was prepared based on our understanding of the tax law in effect at the time it was written as sit applies to the facts that you have provided. http://www.hrblock.com/taxes/tax_tips/index.html
http://www.hrblock.com/taxes/tax_calculators/index.html
Christine
It is itemized deduction. For your home property, even ff you don't itemize, you can still deduct up to $500 ($1000 on a joint return) of real estate taxes paid - there's a worksheet, and you add it to the standard deduction.
Read: http://taxipay.blogspot.com/2008/05/itemized-deductions.html
VA 100% Refinance- Can I refinance if I don't have a current VA loan?
I have heard that there was a recent update to the VA rules that allow for 100% refinancing. My situation is:
I am a veteran that has used VA before.
Non-VA Mortgage= $324k. Value of house: $325k -$330k (estimate)
I have an "80/20" loan. First is 5 year variable ARM, 6.75%. Second is Fixed 9.5% Home Equity.
I bought the home in July of 2007, so there is minimal equity. I do not want cash out, just want to protect myself from the variable that will change in 3 1/2 years and bring it all under 1 mortgage.
Credit is good (676 FICO), though I do have high revolving debt. Salary is $125k with 20% bonus.
Can I refinance under the updated VA rules?
Colanth- when you say each stands on its own, what exactly do you mean? Could I refi the first only? I was under the impression that I had to refi both together...thanks.
You can refi both. The house has to appraise for both, the VA will pay them both off and leave you with one mortgage.
No money down deals were always a BAD idea (whether 80/10/10 or 80/20 or whatever) because the buyer has ZERO equity in the home, and little to prevent them from walking away. With a declining housing market, it is easy for home owner to get upside down on home, owing more than its value. It takes a LONG time to build up equity with that type of loan--might as well rent--it's cheaper than paying ALL that interest. You've adequate credit rating and good income, but your debt to equity level stinks.
That said, it is sometimes possible to do a 100% VA refinance, but more difficult nowadays, and generally a poor financial decision. Consolidating to one fixed rate mortgage is a good idea, but put something down. And with that income, make additional payments of principal, whether $20 a month or $200, and your equity will grow more quickly, and you will pay thousands of dollars less over the life of the loan.
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When buying a home well below market value what is the best way to get the equity out?
Lets say you buy a home for $100,000 thats worth $200,000, what is the most reliable, cost effective, and efficient method to pull out the equity into cash? What is the guaranteed way to do this if possible? Is it possible at closing, or a HELOC after closing, or cash from the seller, or a cash out refinance? most importantly, it has to be legal. thanks
Cash out refi is the way to go. Otherwise you are going to have a tax liability for the $100,000. I have done this a couple of times and it works well. Its legal and easy. Check to make sure that your refi expenses are low. There is a possibility that you could realize a greater return from selling the house. But... that means no brokers fees, a good contract specifying split of costs with the buyer and a good position on your tax situation. Good luck!
Unless you have had an appraisal where YOU HIRE the appraiser, you really have no idea of what that particular home is worth.
If it was that far below market...it would have already been sold.
That is why those people that are "We Buy Ugly Houses" buy then sell.
If you need cash, what would be better? To refinance your home or to get a second mortgage?
Is there such a thing as getting 100% of what you have in equity in your home? I need an expert PLEASE
It really depends on your credit, how much equity you have in your home, and how good your current loan is.
For example if you have a wonderful mortgage with a nice 30 year fixed rate of 5% it would probably be a mistake to lose that to refinance at a higher rate.
But if you have a mediocre mortgage you may well be able to do a refinance that gets you the money you want, and secures a better rate for you.
You need to go an see a mortgage banker with a great reputation (not just some loan officer in a bank) and examine all the options.
There is nothing wrong with either option you suggest, but your credit, your equity, and the details of your current mortgage will determine which is the best way to go.
If you take a equity loan out your interest rate will be at a much higher rate then a refi.
A second mortgage will be anywhere from 9 to 14% if not higher, as to where a refi will be around 6-7% right now and depending on your credit you might be able to get it lower...
Check with your financial institution.
See bellow the website source for more information.
Check out the source website for a pre-app for Hamlin Morgage, licensed in 48 states.
Can I refinance?
Ok, here's my predicament.
I own two homes, H (my residence), and R (rental). I refinanced R at 100% cash out to make the down payment on H, which I bought one year ago, put 30% down, and moved into.
won't go into details, but because of credit issues, my mortgages on both these homes are less than favorable--I need to refinance or sell both within 3 years when ARM goes up.
On the plus side, I'm engaged, so as of January, I will become a DINK with plans to get married next fall.
We want to move into a 3rd home, B (H is 750sf--a little cramped) with hopes that after a short residency B will become another rental I'd like to sell R in the spring and take the equity. I do not want to refi R if possible. I DO want to get H on a 15 yr and rent.
Do I need to wait til I'm married to refi with her income? I'm told rental income isn't considered income by the bank untill 2 years.
no prepay penalies on H or R. FICO ~710. Want to take advantage of lowering rates
I doubt you could refi the rental as you stated you refi'ed it a year ago to 100%. Depending on where you are .... you may be upside down there. If you do sell it in the spring but you're 100% financed........what equity is there in it? Waiting until it adjusts or drops value could be painful both financiallly and credit score wise.
With the equity in the H you should easily be able to refi and hopefully the value has not dropped too drastically. Try to just refi for rate & term with no cash out and keep what equity you do have......it may fluxuate so going to 100 is never a good idea. Especially in this market.
You don't have to be married to purchase a home together. But if you get into a loan with her and things go south.......you'll have bigger problems. So I would advise waiting if you can until after the wedding.
Do you have the income to be able to do yourself?
If they both have arms........I would sell the R now because you may not be able to refi and you dont want to destroy your finances or credit if it's not going to cash flow post adjustment.
Refi the H into a regular loan that will allow you to cashflow if you're going to rent it....probably a 30 as opposed to 15, pay extra if you want to bang it out quicker.
Good Luck
OBA
Whatever you do, sort it out before you get married. There is no reason to ruin her credit as well. May i also suggest that you both have seperate accounts, and have no joint assests. So in a worse case scenario, the banks will just come after you.
To answer your other questions, you do not have to be married to get a mortgage with your fiancee. For your other concern - large, national lenders can typically use at least a portion of rental income if you have a signed lease agreement for the house. You may not need to provide tax returns.
On another note, it might not be best for your cash flow to put H on a 15 year. If you're interested in paying it down, get a 30 year and use an amortization schedule to pay it off like a 15 year. If something comes up and you don't have tenants for a few months, you still have the lower 30 year payment to fall back on and you won't get behind on the mortgage.
I hope I answered your questions. Feel free to contact me directly!
I included a link to explain some mortgage options.
Refinance? Hold On? Lower payment? Can't decide?
I have a house in LA that was worth 1.2 ml a couple of months ago. I owe about 950 on it (second mortgage). my payments are about 6500 every month. My friends tell me to refinance, lower my payments and maybe let go of the house since the prices will drop even in the next two years. I will have prepayment penalty with that one. I also have anothe option of refinancing and getting about 100,000 cash but my payments will go up to 8000 a month, no prepayment penalty, interest only loan. I am very confused. I hate finance, but I don't want to get stuck with a mortgage that is higher than the price of the house. Are there any fortune tellers out there that know what will happen to this housing market and should I stick it out with my house?
The question is, will you need the $100K for anything? If you think you might, or you might like to have that money for an emergency, refinance and take cash out. Obviously, you can afford the $6,500 payment, so the $1,500 difference will be supplemented by that $100K and get you through more then the next two years.
Since housing is dropping right now, it's a good idea to get the loan while the value is up. This gives you more power and will help you get through the difficult down phase of this real estate period. If you wait, you won't have the option next year...but in a couple more years, you're equity will be back up.
If you don't like the idea of paying $8K a month right now, then refinance for what you owe and bring your payment down. It will go down because you owe much less then what it's worth. After, get a Home Equity Line of Credit (HELOC) on the balance. Then, you can borrow the money whenever you need it and only pay interest when you borrow the money.
Hope this helps.
If you are likely to stay put, hold on until the interest savings on a refinance makes mathematical sense or the prepayment penalty period is overcome . But if not, I suggest you sell as I believe your friends are right about the housing prices dropping even more in your market, but will likely recover a few years after. But, that is easier said than done because everyone and their brother are facing the same dilemma as you are.
Do you need that 100,000 cash? If you don't need it, don't put yourself deeper in debt.
I'd recommend that you shop around for a broker/lender and compare the different terms they give you.
Things to keep in mind:
-Get a fixed rate. This way your payments won't go up.
-Stay away from interest only. These loans have temporarily low payments in the first year or so, but your payments shoot up afterwards. The vast majority of people who get these loans forget about the hike, get used to spending the extra cash, and get screwed when the payments shoot up. That, and you aren't paying off the principle so you won't have equity in the home.
-By shopping around you can reduce the chances of meeting a crappy broker/lender who tries to charge you more. A fraction of a percent difference in interest rates is a big chunk of cash for unscrupulous brokers/lenders that will come out of your pocket. Compare interest rates and pick the lowest one to save yourself money.
If you need a broker recommendation I know that http://finfo.com has partner brokers who can help you with selling your home, refinancing, or developing a home equity loan or line of credit.
Hope that helps and best of luck!
Why do you want to take out 100K in equity? What do you need the money FOR that you are considering 8K per month in payments? Interest only, variable rate loans are what caused the housing market to drop a bit and foreclosures to rise. People living paycheck to paycheck went into debt and then a couple of years later, the sper low rate starts rising and they end up robbing peter to pay paul and eventually default on the mortgage. Anyone can be caught with a loan bigger than the value of the house if the market drops. I've always wondered about lenders who offer to loan you 125% of the value of your house. It makes NO sense to me why people would WANT to borrow more money than the house is worth, and then what do you do if as is happening now, the market drops? Best to have the lowest mortgage at the lowest rate and pay it off as fast as you can. Be sure any loan you get has no prepayment fees or penalties. You can see the problem since you have one which has a prepayment fee. Prepayment fees and penalties are there to compensate the lender for future interest income the lender loses when you pay the balance early. One way to avoid the prepayment penalty is to simply include extra to apply to principle. This pays down the balance sooner than if paid by the schedule and the loan concludes early without incurring the penalty. You can turn a 30 year loan into a 10 year loan by doubling up on the payments and applying the over amount to principle.
Ask yourself... can you afford it? do you like your home? do you plan on moving in the near future (2-3 years)?
If you can't afford it you have to do something, selling is the only logical solution. DON'T refi into an interest only situation... eventually you WILL get burned.
If you can afford it and don't plan on moving in the near future, even if you don't like it hold on. Markets are cyclical. Even real estate. If the housing crunch gets worse prices may drop over the next several years in your area, but they will eventually rebound. If your mortgage is higher than your home is worth, but you like your home and aren't being relocated, don't worry it will rebound. (This is what I would do)
If you know you'll be moving in the next year or 2 it may be best to sell if you believe your market will decline further.
Countrywide2008
Is there a mortgage company that will refinance......?
Is there a mortgage company that will refinance at 100% LTV with a low credit score? The mortgage history only shows (1) 30 day late in the life of the mortgage (just over 2 years).....also, I am trying to do a cash out option to consolidate a few other bills and do some home renovations. This still would not make the total loan exceed the value of the property...but with this cost and closing costs...we'd be real close to what we anticipate the appraisal to be. Therefore, we need 100% re-financing. I would really appreciate serious answers...We got stuck with a house that we had sold on land contract with a 5 year balloon,.....we were 3 years into the contract and they abandon the house leaving us with a REAL mess and property taxes unpaid......we don't have the immediate resources to fix it up...but have no choice but to move back into it to keep it from going into foreclosure...Thanks for all your help!!!
Without knowing your actual score, hard to say. Usually you need a 580 score to get 100% financing.
All I can suggest is to call some brokers, and ask them right away if they can do credit score modelling. If they can, see if they'll run you through it and find out what might be able to be done to get you higher. Doing a "rapid rescore" takes a week or two, costs about $100 per tradeline that is updated, but sometimes, something as simple as paying a credit card with a $300 limit and $300 balance down to $100 or paying it off entirely can get you 40 points overnight.
Worst case, is there anyone in your family you could sell the home to, and let them finance it? And put you on a CD like you had it with your old buyers?
Home refinance?
I want to refinance my home and take some cash out.
Is there a such thing as borrowing more than what the house is worth? Say my home was worth $100,000. The balance of my mortgage is $94,000. Which is only $6,000 in equity. I want to refinance and cash out $20,000 to make a purchase. Is this
possible? What do they mean when they say 110% financing?
A 110% financing mean they will finance 100% of your mortgage and 10% of any other debt you have such as credit cards or loans. So when you refinance, they will include your mortgage and 10% of other debts in the loan.
When you refinance, your mortgage will be stretched out to a 30 year loan. Your monthly payment may be lower and your interest rate will change. You have to be careful when you refinance. You want to know what kind of loan you are getting. Is it a fixed-rate loan? An adjustable-rate loan? An interest-only loan? A balloon mortgage?
As for cashing out $20,000 by refinancing, that is not possible. You can take a loan out on your equity, and this loan is called a 2nd mortgage. Or get a $20,000 loan from the bank.
When can I refinance?
I am buying a home and financing 100% of it. Because of this I have 2 mortgages...one has a rate of 6.2% and the other has a rate of 11.99%. I want to refinance the mortgage with the 11.99% rate and take out extra cash to pay off my bills. For example: the loan is for about 50,000 and I would like to take out the mortgage for like 70,000 to pay off bills and pay off this mortgage. I have no pre-payment penalty so I can refinance this whenever I want. If the other mortgage is for 180,000 and the home appraised for 233,000 would I only be able to refinance for 53,000? Or could I refinance for any amount that I want? Any help would be appreciated!
It depends. You may qualify for a 115% loan. This loan lets you borrow 115% of what your home is worth. So you would be eligble to borrow 267,950. So thats over 80k which should cover your mortgage and whatever bills you may have. Possibly some extra cash for home improvements or such.
100 cash out refinance - News
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Shaw Announces Second Quarter Results SYS-CON Media (press release) Shaw Announces Second Quarter ResultsSYS-CON Media (press release), NJOn a longer-term basis, Shaw expects to generate free cash flow and have borrowing capacity sufficient to finance foreseeable future business plans and refinance maturing debt. Funds flow from operations increased over comparative periods primarily due |
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Six Top-Notch Bond Funds Barron's Six Top-Notch Bond FundsBarron'sBe aware that corporate defaults are climbing -- and are expected to continue to rise as many credit-challenged companies are unable to refinance their high-yield debt when their bonds mature. This probably won't change until the economy shows signs of |
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HSBC raises £12.9bn but FTSE falls below 4000 Telegraph.co.uk HSBC raises £12.9bn but FTSE falls below 4000Telegraph.co.uk, United KingdomYell Group jumped 6¾ to 31.7p despite denials from the company that the company plans to appoint advisers to carry out a debt restructuring. Company sources said there are no plans to refinance or to appoint debt restructuring experts to look at its |
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Annual Report to shareholders Sydney Morning Herald Annual Report to shareholdersSydney Morning Herald, Australia extend the maturity profile 200 of both our $100 million Westpac receivables facility and $100 million 100 of syndicated facilities out to a variety of maturities in 2011. In conjunction with the earlier elmo de Alwis 0 refinance in September 2008 |
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Voice of the Day Springfield SBA office working to get cash out News-Leader.com Voice of the Day Springfield SBA office working to get cash outNews-Leader.com, MOThe Recovery Act authorizes the SBA to use its 504 program in various ways: to refinance existing loans for fixed assets in a business expansion project; to use its guarantee authority to establish a secondary market; and to make loans to |
