Navigation
Search
Friends

Is a Cash-In Refinance a Good Idea? NASDAQ

16.08.11

Does it make sense to pay down your mortgage in order to be able to refinance at today's super-low rates? Is this a good strategy for homeowners who are underwater on their mortgages?

A lot of homeowners seem to think so. According to Freddie Mac, over one-quarter of all mortgages refinanced in the second quarter of 2011 were "cash-in" refinances, where borrowers paid down a significant part of their mortgage balance as part of the transaction.

 

At first glance, a cash-in refinance is a fairly straightforward solution for borrowers who'd like to refinance, but can't because declining property values have left them owing more on their mortgage than their property is worth. But it tends to be expensive. To get back into positive equity, underwater homeowners may have to write a check for several tens of thousands of dollars, if not more.

 

Generally, you don't want to do a cash-in refinance unless you're certain it's the best use of your money. Here's some of the main things to consider when deciding whether a cash-in refinance makes sense for you.

Source:

Refinance Help. Fill this form and get help!

COMPARE MORTGAGE RATE-REFINANCE-MORTGAGE LOANS-HOME EQUITY LOANS-HOME LOANS ...

COMPARE MORTGAGE RATE-REFINANCE-MORTGAGE LOANS-HOME EQUITY LOANS-HOME LOANS VISIT US NOW AND APPLY ONLINE NO FEES GUARANTEED APPROVAL If you&#39 ...

Mortgage help i just refinanced my home and got a adjustable rate can i still refinance and keep my loan 50k?

Sep 05, 2007 by Andrew W | Posted in Renting & Real Estate

i just refinanced my home the original value was 45k and i had it paid down to 35k. when i refinanced it brought the value i need to pay back up to 51k. i have a adjustable rate now that will kick in may of 09 my percent is 12.750 i think. i pay 500 a month now for the mortgage and 720 total with all the taxes and stuff. i dont have a penalty for paying the loan of early so i want to pay it off in the next five years but with the arm my percent can go as high as 18.750. i dont want the bank to take my house from me because of the mistake i made by refinancing in the first place. so is it possible to refinance into a fixed rate and still keep the loan at 50k and still pay it of early with out any penalty. this is my first post so plz any and all help is great

Whether or not you personally can do any kind of refinance depends on your credit, income, and the value of the home.

If you're asking if no or low closing cost mortgages exist? Absolutely. Typically the rates are a little bit higher, but honestly your rate is really high right now, it should still be significantly cheaper than 12.75 even with the bank paying the closing costs.
By the way check your Adjustable Rate Rider from your original mortgage. Odds are there are caps on how much and how often your rate will adjust. If you're paying this loan off in the next few years it may not even be possible for it to adjust up to 18.75 that quickly.

matzael | Sep 06, 2007

Before you refinance again try credit repair... Improve your FICO score for a better rate....
too l | Sep 06, 2007

If you have room on your credit card, you can use a service like http://cardit.com to pay your mortgage with it. The purchase is not a cash advance, so if you have a good rate on your card, it will be fixed and possibly better than your adjustable.
rechdxs | Sep 07, 2007

Looking to find lowest refinance home mortgage rates?

Feb 11, 2008 by TJR | Posted in Personal Finance

I’m looking for a better home loan mortgage rate than I currently have with my bank. So I am seriously considering refinancing. Does anyone know where I can currently check for the lowest refinance home mortgage rates?

You can actually get a better mortgage rate – without refinancing. There is a website which allows you to check for free if there is a better rate available with your current lender.

You can avoid the costs and all the paperwork and hassle associated with refinancing. Your bank won’t tell you that there is a better rate available with them, but there usually is.

Check for a lower rate here free:

http://www.checkmyrate.com.au

webllinks | Feb 11, 2008

The first thing I would do is get a copy of your credit report and score. Lending tree is a comparable rate lender that offers you several rates from competing banks, but you should know what your score is first! This is what the banks will be looking at!
Abc D | Feb 11, 2008

first get your credit score card -- next shop around just like you are buying a car!!!
mister ed | Feb 11, 2008

The only way for you to get the lowest rate possible is to shop around. There are several websites that get you multiple quotes from qualified lenders. You will have to be willing to give out your information online. Try a service such as https://www.bills.com/homeloan/mortgage_refinance/ they have a separate section to get quotes for refinance loans. You may be matched with up to 4 lenders, who will call you to discuss your options. The service is free to use. Also check on www.bankrate.com for the current interest rates for a refinance loan to get an idea.
Dharwadian | Feb 12, 2008

if i take out a home equity loan now will this loan affect me if i want to refinance my mortgage.?

Jan 30, 2008 by michael o | Posted in Personal Finance

I have 24 years left on 30 year mortgage. I am thinking about a home equity loan at a favorable rate, rather than roll in to refinance consolidation. If rates are favorable later this year i may like to refinance 1st mortgage at 15 years. Will home equity loan affect my refinancing even if i am not looking for any cash out.

Right now rates are LOW, I would just refi instead of the HELOC that might cost you 7% on up. Why pay for 2 transactions.

Deliah | Jan 30, 2008

You bet it will affect your ability to refi. A refi with cash out is always better than a second loan.
engineer50 | Jan 30, 2008

All of your borrowing is based on the equity you have in your home, your credit, and ability to repay the loans. In your case if you have the equity for the 2nd, and take it out now - and then re-fi the first later on down the road you will likely have more closing costs for these transactions that if you did one, but as long as you have equity, credit, and ability to pay, then a lender will do the transactions for you.

Note: as the year goes on, it's possible that the value of housing may decline some (negating some of the equity you have), and if you go from a 30 to a 15, then your higher payement will bring your debt to income ratio up - which means that your loan won't look as favorable to take advantage of the best rates offered, which may make that waiting game not so good an idea.

best bet, make an appointment with a mortgage lender that has the tools on his/her desk to run the numbers though the scenario and find the best solution for you.
jon b | Jan 31, 2008

if you pay your loan out early be carful that there is no penalty for doing so.. ask your lender
Rob Day | Jan 31, 2008

Can a person refinance a home equity loan, as opposed to a refinancing a mortgage? ?

Jan 23, 2009 by km | Posted in Renting & Real Estate

A couple of years ago, my spouse and I doubled the size of our home which we had owned "free and clear." To do so, we took out a 20 year home equity loan for $250,000 at a rate of 5.85%. Since we already owned the home and this was technically not a mortgage, there was no downpayment on this loan. With rates coming down, do we have any hope of refinancing our home equity loan? Or, is refinancing basically restricted to mortgages? Thanks.

because the loan was secured by real estate it is technically a mortgage. If you do refinance you will be looking at a either a new conventional mortgage or a new home equity loan.

Noneya | Jan 24, 2009

You can refinance a home equity loan. 5.85 seem like a very low rate as it is for a home equity though.
scottsmylie | Jan 23, 2009

Refinance Mortgage or Home Equity Loan?

Sep 16, 2008 by Bleaker | Posted in Renting & Real Estate

I need to get some home repairs done and have the option to refinance my mortgage at the same rate (6%) for 30yrs or go the Home Equity loan route with 7.85% for 15 years. Does anyone know if one option is better than the other in the long run?

If you could get 6% on a cash out refinance without PMI and minimal costs, the new first mortgage would give you a lower average cost of funds and monthly payments.

On the other hand, if you have to pay a couple thousand in closing costs on a new first, the low closing cost on the 2nd might be better. It may really come down to how much additional borrowing you would be doing at the higher rate vs. what the difference in closing costs is.

To do a proper analysis, I would need more information. I would suggest calling a couple banks and having them put together some good faith estimates. The analysis is not difficult so any competent loan officer should be able to help you with it. Watch out for pressure to refinance the first. If you are only borrowing a few thousand on the 2nd (home equity), you are probably going to be better off going that route, the the LO may try to steer you into a new first as they can't make any money on a little loan.

Good luck.

Dale H | Sep 16, 2008

find a new mortgage company and do a refinance. rates are not 6% right now. they are 5.625% anything higher is a rip off.

home equity lines of credit are not fixed rates and rates are the lowest they have been in over a year. makes no sense to get on an adjustable rate when all rates are going to do is go up from here...

good luck.
Kain | Sep 16, 2008

You have to look at the whole picture. If you have your mortgage loan for long time and had paid most of the interest, refinancing means you start over again to pay those interest plus closing cost. How much are you gonna need for your home repair? If it's a small amount like $5k to $30k, you may want to lend from your HELOC instead because it's a interest only and very flexible with payment. You can pay extra each month to bring it down in few years. Its interest rate usually lower than a 30 years loan. Bank of America is about 4.5% and no closing cost at all. Check it yourself and do the calculation. Most of the HELOC interest you paid is tax deductible. Usually after 15 years it will turn to a fixed rate or you can refinance to a fixed rate any time you want.
MM C | Sep 16, 2008

For the short run, get an home equity line of credit. These can be gotten at rates of prime to prime-1% now at 5. Todays news indicates the rates may go down, not up. Then when rates do start up, you can switch then to a long term fixed program. Often if you stay within the same bank there will be little to no closing costs.
Eternal Optimist | Sep 16, 2008

I think mortgage refinancing with cash-out could be the best option. As you can get a extra cash with paying your original loan and also you can getter better rates through refinancing. While in home equity loan even if the years are less you would have to pay for two loans.


Here is the source of a mortgage refinancing company named http://iloanshop.com/apply_mortgage.php for your reference
Laurence S | Sep 17, 2008

Is there such a loan mortgage to refinance a home with people with bad credit?

Jul 11, 2007 by dhsbc/net | Posted in Credit

intrest rate went up but having difficulty making payments and lowering my credit score

It may be too late if you have missed mortgage payments already but find an FHA Lender for a refi. The FHA program is back in favor now that people are in ARM's that are about to explode on them.

There are still plenty of Subprime Lenders who refi on bad credit but if you can go FHA, that will get you into a 30 year fixed with a very good rate. Yes, you will have to pay PMI, but it will likely be worth it depending on what your payments will adjust to.

Best wishes!

Me2Me2Me3@yahoo.com

Me2 Me2 | Jul 11, 2007

there are companies that do this, but you will pay alot. I am trying to get a home equity loan but my credit is horrible.

Currently I am working on getting my credit score higher so I can get that loan.

I can get one now but I will pay 18% interest and thats no good.
Silentrage | Jul 11, 2007

It depends how bad your credit is. Everyone is really tightening up on lending. My best advise to you is to do whatever it takes to make your mortgage payments on time, the more you are late the harder it will be to get another loan and eventually impossible and you will end up losing your home.
Shar | Jul 11, 2007

I suggest Hometown Banc Corp. They may be your best opportunity for someone to say yes. If your credit does not measure up, they don’t simply “forget to call you back.” They help you get into a credit repair program you can afford regardless of income. Check out the free evaluation form at the source website and a Hometown loan officer will contact you .
stephen l | Jul 11, 2007

You need to talk to someone in the mortgage industry immediately. FHA will probably be your best bet if you haven't been late beyond 30 days on the mortgage. If you have and there is a good enough reason, then you may be able to write a letter of explanation and still have it refinanced. Ask friends and family about their recent mortgage experiences and asked them to refer you to someone if they had a good experience. There's a lot people in the industry looking to take advantage of people just like you.. So be careful.
honestmortgageguy24 | Jul 12, 2007

Which bank offers the lowest interest rate for mortgage refinance in California?

Mar 06, 2006 by dinofernandez66 | Posted in Renting & Real Estate

I need to refinance my second/investment home in Milpitas California and I'm looking for a mortgage broker or a bank that offers lowest interest rate based on 700 or more fico score. Preferably a loan program with minimum monthly payment is preferred.

find the best rate you can find and then add 1% (1 point is what is the standard to add when dealing with an investment home)

A mortgage broker is supposed to find you the best rate from all the companies she works with. If you don't have a good one shop around.

Here is a website to find the average and best rates:
http://www.bankrate.com/brm/default.asp

brian-the-brain | Mar 06, 2006

try washington mutual,indymac bank and homecomings ,they have the low rates now
saghieh | Mar 06, 2006

I hear Creative Mortgage is a good company to work with. Toll free number is 866-488-0929. They Say ask for Anthony in human recourse's.?
happeehome12 | Mar 11, 2006

Which company is the best home mortgage lender to refinance with in california?

Aug 06, 2008 by spooky | Posted in Renting & Real Estate

I am interested in refinancing my current loan to a fixed rate 30-yr loan. I'd prefer to deal with a lender that is in california. any recommendations? i'd like to hear about your personal experience with the company recommended. thanks!

Where can I find the best mortgage rate for refinancing?

Sep 24, 2006 by jbatschool | Posted in Personal Finance

I am not sure whether to refinance with debt consolidation, cash out or a home equity loan or line of credit.

Hi there,

I hope yo havent conta ted the gentleman that seems to live overseas, and doesnt really have the concept of the english language down pact yet... Probably not your best bet...

Looks like you basically are in need of $cash$ to obviously pay down some debts... (based on your question)

So to keep it short and simple, out of the three options that you have sited, two of them are the same thing... A cash out refinance is the same as a debt consolidation refinance... A home ewuity line of credit on the other hand is a completely different story...

A home equity line of credit (HELOC) is a quick and easy way to get money out of a property... However, they are one of the worst debts for any person to carry...

Large banks will push these programs on customers for one simple reason.. They make double the interet!!!

A HELOC is basically a giant credit card secured against your home.. It shows on your credit as a "Revolving debt" rather then a "real estate debt" like a mortgage...

A "revolving debt" is the smae as a credit card, or charge card at a retail store... They are bad for your credit if you carry high balances... The average HELOC is over $20k, so your credit is sure to decrease by using a HELOC...

This is also why you always see commercials and billboards promoting HELOC's.. They say low to no costs, etc. There is a reason they want to give you these loans for free... They make double the intere3st because a HELOC IS COMPOUNDED INTEREST (same as a credit card)... (not like simple interest on a mortgage or car loan)

So, if you need cash to pay debts, home improvemets, etc. i always suggest to refinance the mortgage and take out what you need...

I would be happy to assist you with any further questions, or even help you with the loan process if need be.. .I work with providential Bancorp, we are a nationwide mortgage lender...

Feel free to call or email me at any time!!

Jason Fry
Licensed Mortgage Banker
Providential Bancorp
jasonf@providential.com
312-264-6448

MortgageGuy | Sep 25, 2006

My Mortgage Rate is 6.5% for my 380 loan. Should I refinance now or still wait. ?

Dec 15, 2008 by marco l | Posted in Renting & Real Estate

I also have a home equity with a varible of 5.15 at the moment total amount 122K. I need some expert advise !!! Let me know where i should go ...who has the best rates... should i do it at all.... help... only been in the US for 6 years and have not much of a clue about the system and how you can work it the best. Thanks a bunch ! Marco