Is a Cash-In Refinance a Good Idea? NASDAQ
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.
Home Refinancing And Second Mortgages
Article by Brian Klachko
Home refinancing and second mortgages are two ways in which an individual can get some additional funds. Refinancing lowers monthly payments, saving you money that you can use towards other causes. A second mortgage is a secured loan against your property. You are borrowing against the equity in your home. The following discusses the purposes of both.Home RefinancingIf you find that your monthly payments are too much to handle, then refinancing could be a viable solution. It could also result in savings if the interest rates have dropped since you took out your mortgage. If your earnings are significantly more than in previous years, then perhaps you would like to shorten the length of your mortgage, and increase your payments. This way, you can pay off your mortgage sooner.Generally speaking, if you can get an interest rate that is at least 2% lower, then it makes sense to refinance. Anything less than 2% may not be worth doing.You can extend the term of your mortgage in order to get lower payments. However, this will result in higher interest rates, and the total amount paid will be more overall. So this option is only advisable unless it’s absolutely necessary.One of the downsides with home refinancing is the closing costs. This is why the 2% is the rule of thumb for refinancing, because anything less may not result in much savings at all.Second MortgageA second mortgage can really be used for just about any purpose. One common use is for home renovations. Many view their home as an asset, and renovations only add value to them. The result is having even more equity in your home.With rising tuition rates, some parents will take out a second mortgage to pay for their child’s college education. This option often times is less costly than some of the other alternatives available. The monthly payments for the mortgage can be spread out over time so it’s more easily affordable.A second mortgage can be beneficial for someone who has a lot of debt to pay off. The interest rates for many types of debt can be much higher than what you would pay for a second mortgage. This is especially true for credit card debt. Over time, you will eliminate debt and save a lot of money.So how do you know whether to refinance or take out a second mortgage? If you want a lower monthly payment, then refinancing could be the answer. If you are looking to pay off debt or cover some other expense such as college tuition, then a second mortgage makes sense. Regardless, always read the fine print and know exactly what you’re getting into.
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Mortgage Information : How to Refinance a First & Second Mortgage
Refinancing a first and second mortgage together is a simple process that is quite similar to a first mortgage refinance, but the two loans are ...
I like to know if there is a company will refinance second mortgage after 1 month of purchase.?
I would like to know if there is a company who will refinance second mortgage after the house being purchased a month. If they do it will they do the price up the appraisal instead the price of the last month purchased. I like to do stated income and stated asset program.
Check your Note for the 2nd mortgage you're trying to refinance carefully. Many 2nds have prepayment penalties!!!! That would make any changes probably not worth it, as they're usually somewhere around 6 months worth of interest in the first year.
I would say, if you qualified for the first and 2nd to begin with you could probably qualify again, but I'm assuming your financial information has changed in the month since you purchased and this may not be the case.
Did you purchase the house for under appraised value? It would be extremely rare for a house to appreciate in the first month, although some areas of the country are moving up quite fast.
I don't know if there is any good answer. The best thing you can do is go back to your original loan agent and ask. It can never hurt and they're always willing to try to make things work and make their commissions!
contact a mortgage banker, it will cost you more money but they always seem to work it out! you personally looking for a lender could be quite daunting. they may be able to even get you a better rate. do you know if you have any prepayment penalty riders on that loan? it may not be worth it. at least give it a try. you don't know until you know!
1. you have been in the house a month and you need money
2. you can't show your income
3. You bought the house a month ago...
Ok, now that that is out of the way, you can refinance the existing mortgage itself, but most likely you won't qualify for a 2nd mortgage thats going to make it worth your while to pursue. If you put money down when you did the purchase, you can extend the mortgage to cover the amount that you put down. Secured funding would be a good company to check with for a 2nd mortgage but you aren't going to get above the value of the property, they are going to require some seasoning on it. At least 6 months but most likely a full year.
Just put yourself in the investors shoes and ask yourself, "If I had the money, would I want to lend it to me?" This is not based on how good a person you are, it's based solely on the parameters of the three C's... Credit, capacity (can you pay me back) and Collateral (what's the home worth)
In this case, I know you are missing two of the C's and if you are missing the Credit portion (Which is likely since you just bought a house) you are out of the game completely.
Hope my honesty helps you. Again, I'm not trying to beat you up, just trying to put things in perspective. In my opinion, I would wait it out til you can qualify for a decent refinance.
I work with several lenders who will allow cash out with no seasoning and will use a new appriased value. These are A-paper lenders however.
If your on a non-prime loan then you may have a couple of hurdles to overcome: some lenders will not allow their 2nd mortgage to become untied to the 1st lien. In this case you would need to refinaince the entire property; you may have a large pre-payment penalty etc...
If you would like to discuss your situation drop me a line.
Kevin 866-562-6838 x 106
kruorock@firstratelending.com
www.firstratelending.com
So you can e-mail your information at mymortgage@inbox.com
Can we refinance our second mortgage?
We bought a house last year with two mortgages. Because we only put down 10% for the loan, having the second mortgage of 10% of the loan, this way we don't have to pay for the insurance. This second mortgage has an interest rate of 9.75% while our other mortgage is at 6%. We want to refinance this second mortgage to a lower rate. Can we do that? Is there anything that preventing us from refinance just this second mortgage? There is no early payment (repayment) penalty on both of our mortgages. Thank you very much for your help.
most likely you wont be able to just do the second you will have to do the first as well combining them together. You should have done better research though. If you have good credit and a good history of paying on time then you could have been elidgable for programs that have no PMI up to 90%. My company has these if you are interested email me. cheeba0228@yahoo.com
Log into:http://www.4refinancemortgage.com/yourmortgagebasics/second_mortgage.html
http://www.4refinancemortgage.com/index.html and learn
all the basis and insight into mortgage refinancing.
http://www.help-with-your-rent-mortgage.org
Hope this helps!
1.How are property prices holding up in your area?
2.How strong is your credit profile now?
3.Are you willing and able to verify your income and/or assets?
Something that you need to be wary of are the modifications recently done to the Loan Level Pricing Adjustments made by Fannie Mae and Freedie Mac. Basically these are premiums that lenders are forced to assess onto interest rates depending on how risky a loan is. For instance, the rate of a 95% loan on an investment property will be significantly higher than the rate of an 80% loan on your own home because of the pricing adjustments assessed on rates on investment properties and loans above 80% due to the greater risk they represent to lenders.
Even more imperative is the need to make a decision that is inline with your long term financial plans. This means that any new financing you obtain should take into account your children’s 529 college savings plan (if applicable), any major expenses you’re contemplating in the immediate future (a new car, the purchase of a second home, the birth of a child, etc., etc.), your present investment strategy, your insurance needs and obligations or other important financial plans that can be complicated or even derailed if you make the wrong decision about your mortgage financing now.
If you’re looking for a comprehensive solution to your financing needs feel free to contact me at RLFunding@AOL.com. We are licensed in all 50 states and specialize in TAX FREE mortgages in the state of New York.
Best Regards,
J. Polanco
Financing Advisor
Robbins and Lloyd Mortgage Corp.
347 5th Avenue, Suite 1506
New York, New York 10016
www.RobbinsLloyd.com
What is the difference between a second mortgage and a refinance?
I am financing a pool and was told by the lender that a refinance and a second mortgage are the same thing. Is that correct?
No. A refinance gives you a new mortgage with a lower interest rate.
A second mortgage is a mortgage taken out on property that already has one mortgage, with priority in settlement of claims given to the earlier mortgage. In other words, you have two mortgages.
A refinance would be getting a new mortgage with new terms. When you refinance, you pay off your prior mortgage and start with a new one.
Check the fine print and ask a trusted investment attorney for laymen's explanation of any such deals; laws vary from state to state.
In the end, they both meet one end if you default on the deal: you lose your house.
Can we refinance a second mortgage in the name of a trust?
Please only people with Title COmpany information answer this question. I asked my bank, and they could not answer my question. Here is the situation.
The house we live in was owned my my mother in law, and she had a second mortgage taken out on the house of $50,000 (that is all that is owed on the house) Approx value of the house is $400,000+.
She passed and the house went into the name of the trust with 3 siblings.
The $50,000 loan was a variable interest loan, and is now skyrocketing.
Can we get a mortgage loan for the $50,000 and keep the house in the name of the trust (with all 3 siblings still on the trust).?
Can we keep the property in a trust?
What steps must we take to do this (obviously all 3 members on the trust have to sign).
Thanks in advance.
In order to qualify for the loan, the trust has to have a credit history and source of income. Well, trusts can have a source of income (rent, in this case), but it's rare that they have a credit history.
The way most folks have to do this is temporarily quitclaim it to the folks who qualify for the mortgage, them quitclaim it back to the trust, who agrees to be responsible to them for the payments, loan balance, indemnities, etcetera.
Another way is for the people to guarantee repayment, but this is complex and may result in higher rates than the first way..
Either way, there are tax and credit implications. Talk to an accountant about the one, and ask your loan officer about the second. If the loan officer is clueless, run "Cosigning Mortgages" through a search engine, but I wouldn't trust a clueless loan officer.
Where can I find the best HELOC rates to refinance my second mortgage?
My current rate is near 10%, and I'd like to find a HELOC rate of prime minus 1%, no fees, and accepting a LTV of 90%
I agree, www.bankrate.com has rates from many different lenders, and links to specific places to obtain loans, like lowermybills.com. the HELOC rates are around 7%, but I'm not sure if they will allow an LTV of 90%.
http://www.bankrate.com/brm/rate/brm_loansearch.asp
Out of all of the banks that I have worked with, I find that CHASE, WELLS FARGO, and US BANK offer great rates and very low hassle.
So like I say, what you are going to do with it, should play a factor in selecting the propor HELOC.
Pen Fed CU regularly has extremely good rates on both HELOCs and regular home equity loans.
https://www.penfed.org/index.asp
You won't get such terms as prime minus 1% on a 2nd mtg either, have you thought about what's the avg. rate you are paying for BOTH your 1st and 2nd mtg.? Consider refinancing and consolidating both mtgs into one.
Can I refinance a second mortgage with another bank to get a lower rate?
You can always shop around as much as you want; you are a consumer and you have the right to do business with whomever you want! Credit Unions and commercial banks are always looking for good people to lend money to. There are web-based companies that shop for you then get a commission if you do business with the firms they recommend. You have many options! Keep in mind that credit is very tight right now and without strong credit scores you'll be offered higher rates on loans and in some cases, with low scores, no offers at all.
Then yu wood hafta konvins banker...kan yu?
refinans requie kloes kosts. Banker mae insist on get hous revalued.
Can you refinance a first mortgage without refinancing your second mortgage?
Only if the second lender agrees, and they probably won't. The technical term is "subordination." If the second lender won't subordinate to a new first loan, you're SOL.
Yes, but in the event of a forced sale, the first creditor to receive money from the sale is the earliest mortgage company.
Or in your case, the second mortgage company becomes first in line and now is the 1st mortgage Co. The First mortgage company becomes second by virtue of the later date.
First can stay in first, if the second mortgage company subordinates to the first.
In short, as a rule, the earliest in line gets the ticket to the concert.
Now why would you want to refinance your first mortgage and not your second mortgage? There must be a conflict with the first and you are tired of them or you are behind in payments with your first mortgage.
It make more financial sense to refinance both the first and second thus lowering your combined interest rate, thereby saving you in the long run.
If you insist on refiancing your first and not your second, for what reason would your second want to do this, it does them no good.
About the only benefit I can see from you not paying off a second during a refinance is because you have a government silent 2nd. In most cases they will not subordinate unless there is a compleling reason for them to do so. If you have an emergency they will subordinate in most cases.
I hope this has been of some use to you, good luck.
"FIGHT ON"
Most secondary lenders will allow this if your not cashing out and if your first mortgage is not negative amortization. I, however have realtionshps with most major banks so I can negotiate with them to subordinate. If you'd like my help please feel free to call me on my cel phone at 818-800-2050 between 10-6pm PST
How do I know when it is time to refinance my 2 mortgages into 1?
I bought my house a year ago, and put 3% down. We took out an 80% first mortgage and 20% second mortgage. Our second mortgage is adjusting and keeps going up every month. I do not want to pay Private Mortgage Insurance, but also do not want to keep seeing my payment go up. How do I find out if I have 20% equity in the house? Should I refinance it?
I am a loan officer and as much as I would like to close a loan, it would not be good for you to do so now.
If you can knuckle under until your home appreciates where you can get an 80% ltv then you will be best served unless you can get solid numbers of a fixed rate that lowers your current payment.
If you would like, I would be happy to work up those numbers, but I do not recommend refinancing unless you are going to a fixed rate and lowering your monthly payment. That is not likely with the current situation.
You can locate me with my 360 degree account
I have a first and second mortgage, can I refinance just the first?
I want to keep my HELOC open and just refinance my ARM. Can this be done?
That depends upon the second mortgage holder.
When you refinance your first mortgage, you are essentially paying it off. At that instant, the second mortgage becomes the first mortgage, unless the second mortgage holder agrees to subordinate to the new first mortgage.
You will need to contact the second mortgage holder. Since a mortgage is involved, I would suggest that only a written response of permission would suffice.
Believe it or not, some second mortgage holders categorically refuse to allow this, even when the first mortgage would be for the same outstanding amount and at a lower interest rate.
Can you refinance the first mortgage and the second mortgage independently?
Absolutely. However, you will get two very different interest rates. Your first mortgage will be around 5.75% and your second will be closer to 7.50%.
refinance second mortgages - News
New Mortgage Plan to Focus on Lowering Payments - Washington Post
ABC NewsNew Mortgage Plan to Focus on Lowering Payments For instance, Congress established Hope for Homeowners late last year to help troubled homeowners refinance into new loans. But since that program was Obama To Push Housing Ideas Today In Arizona Obama to unveil housing market plan
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A plan for home owners - Detroit Free Press A plan for home owners I call it REIMR — government-sponsored Reduced-Equity Insurance for Mortgage Refinance. The $787-billion compromise stimulus bill signed by the president |
Obama signs $787 billion stimulus bill - Minneapolis Star Tribune
ABC NewsObama signs $787 billion stimulus bill If Treasury uses the $350 Billion to refinance troubled mortgages at the low interest rates available today, YOU get the money for the part of the troubled Video: Obama signs stimulus bill Obama signs huge stimulus, readies foreclosure aid
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America's New Housing Problem: Unemployment - Forbes America's New Housing Problem: Unemployment While home prices were on the upswing, an unemployed borrower could sell the property or refinance, raising cash, but now, with property depreciating, |
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Mortgage Fraud: A Scourge of the 21st Century? - Insurance News Net (press release) Mortgage Fraud: A Scourge of the 21st Century? Phantom second liens. In a variation of the previous scheme, a person assumes a homeowner's identity and takes out an additional loan or second mortgage in |