Can You Refinance With Your Equity? NASDAQ
With mortgage rates once again near historic lows, you might be one of the many homeowners who would like to refinance their mortgage. The question is, do you have enough home equity to do it?
Your home equity is the #1 factor in determining whether or not you can refinance your mortgage. In the current market, lenders just aren't willing to offer you a new loan unless you have at least some equity in the property.
How much home equity is enough?
How much? Well, 20 percent is the standard required to get the best interest rates - anything less than that and you'll probably end up paying another one-eighth to one-quarter of a percentage point more in interest. You're still probably on good ground at 10 percent, though 5 percent may be a bit iffy, particularly if you're in a weak local housing market.
What if you're underwater?
If you have little or no equity - or are "underwater" on your mortgage, owing more than the property is worth - you're not completely out of luck. There are certain programs, most notably the federal Home Affordable Refinance Program, that are designed to help borrowers refinance when they have little or negative equity.
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Is it possible to refinance your mortgage to get caught up on bills and late mortgage payments?
we have tried twice to refinance our house through a bank in order to get caught back up on the mortgage payments that we are behind and to do some home repairs, etc however we keep being told no because we are in fact behind several house payments. Is there anyone out there who will refinance you in a situation such as this?
right now it is going to be extra hard to find some one to refinance your home -- i would rather see you gather all the family around the table and say for the next 12 months we are going to get out act together and get out finances in order and to do that we are going to down size -- we are just keeping what we need and nothing we want -- such as interent service -- cable tv -- cell phones -- and any other nice but not required items --- i am sure you could save enough to get your selves back on your feet!!!
But once it is done you will feel a lot better!
1. - Can you borrow the money from somewhere to get yourself current on your mortgage? FHA will do a loan for you up to 85% LTV. However you must be able to show income to support the loan.
2. - If this is not an option your current lender will probably be willing to enter into a forberance agreement with you allowing you to spread what you are currently behind over a period of time, usualy 12-months. This might not be the answer for you as it sounds like you can't make the payments you have currently.
3. - Debt consolidation and restructuring may be the best alternative. If your current debt payments (non-mortgage) were cut in half could you afford to stay current then? If so speak to a reputable credit counselor to see if they can get you involved in a repayment program. It's going to wreak havoc on your credit but it sounds to me like you're past that point anyway.
What ever you decide to do be sure to communicate with your creditors. Ignoring the problem will only make it grow.
I'd strongly recomend talking to a good and honest broker - most of the time brokers have access to programs that banks can't offer you. Banks have a limited program menu, and if you don't fit their guidelines they can't lend to you. However a broker has access to many direct lenders that offer more specialized programs for specific clients.
For lack of a better analogy, when it comes to mortgages lending a bank might be like a Nike store and a broker like a athletic shoe store: if all you want it Nike, go to their store. But if you want a selection beyond Nike, go to the store with more of a selection. LoL - that's not perfect, but I hope you get my point.
Can you add people to your mortgage when you refinance?
My mother isn't working and I wish to refinance her mortgage using my income since her rate is 8%. I live in the property and want to have some ownership rights as I'm paying the mortgage and such. She has no problem with me doing so. Any suggestions ?
yes!
Yes, and I'll be glad to help you.
You should have a purchase agreement with your mom that stipulates what ownership you own and what ownership she owns on the resulting refinance. You will need that purchase agreement to show to the loan officer as to why you are doing what you are doing and it will show that at closing, a deed from your mom to you and your mom will be executed showing what each one of you owns in the title.
You will both need to apply for the loan and sign both the promissory note that creates the debt and the mortgage which gives the lender the right to proceed against you and your mom in court and take the property if payment on the note is not made.
Since your mom's interest will change in the propety you might also want to consider having your mom deed on death her interest to you if you live in Arizona, Arkansas, Colorado, Kansas, Missouri, Nevada, New Mexico, Ohio, Wisconsin, Florida. This would eliminate a novation to her will or probate issues if she has no will. You can do the same thing but deed to your mom or the heir of your choice. Be sure to have alternative beneficiaries.
Here are some links that you might want to read up on:
The HUD-1 closing costs form explained: http://www.alta.org/consumer/hud1.cfm
HUD Sample of Good Faith Estimate: http://www.hud.gov/offices/hsg/sfh/res/resappc.cfm
HUD Revised Borrower’s Closing costs guidelines: http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=MLET&s1=06-$[no]&op1=AND&SECT1=TXTHLB&SECT5=MLET&u=./hudclips.cgi&p=1&r=23&f=G
Real Estate Settlement Procedures Act (RESPA) [about closing costs & settlement procedures]: http://www.hud.gov/offices/hsg/sfh/res/respa_hm.cfm
Mortgage Calculators – Includes finding if you will qualify for a mortgage:
http://www.mortgage-x.com/calculators/Pre-Qualifier.htm
Once per year free credit report from all three credit reporting agencies:
http://www.annualcreditreport.com/cra/index.jsp
Predatory Lending information from ABA: http://www.aba.com/Consumer+Connection/CNC_pred1.htm
Uniform Residential Loan Application: http://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtrans/1003.pdf#search=%22Uniform%20Residential%20Loan%20Application%22
Mortgage Loan Fraud a report http://www.fincen.gov/MortgageLoanFraud.pdf
IRS publication on Home interest deduction: http://www.irs.gov/publications/p936/ar02.html#d0e1835 and or: http://www.irs.gov/faqs/faq3-6.html
IRS: Selling your Home Publication: http://www.irs.gov/publications/p523/index.html and http://www.irs.gov/publications/p523/ar02.html
IRS: Tax information when buying a home: http://www.irs.gov/publications/p530/ix01.html
IRS: Deductible costs when purchasing real property:
http://www.irs.gov/publications/p551/ar02.html#d0e2000
Needless to say there are a lot more but these will give you a general overview. Work with a reputable local lender and a mortgage broker and compare not only the rate of the fixed note and mortgage but the costs to refinance with either one of them. I hope this helps you understand it a little bit better.
Buena Suerte
Marty
Can you refinance your mortgage after living in a condo for only two years?
I suspect my son has an ARM and has one more year to refinance before the interest rate changes. Is there normally a penalty involved if he refinances before the adjustable rates kick in?
You can refinance, as long as there is enough equity in the property. The fixed rates are good now too. As far as the prepay penalty, you'll have to check the initial document your son signed at closing. It should be on the note. Just call up the bank that holds the note. They may even offer to do it for him at a reasonable cost. Good borrowers are really in the driver's seat right now. A bank would certainly rather give someone a lower fixed rate as opposed to raising it and hoping they are able to make the payments. Call them up and check it out.
Good luck.
I'm not sure about any penalties for early refinancing of ARM's. I've heard that some do and some don't. He has to check his mortgage paperwork.
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The only problem is that condo's do not appreciate in value like homes. Adding in the fees, you could owe more than the condo is currently worth.
there will only be a penalty if he has a pre-pay on the mortgage...if he were to refi with the same bank they might wave some of it too, if not all. they want your business. especially at this time in the market.
other wise if he goes with a different lender they might work the fees into his new loan.
this is only if he has a prepay, otherwise he is free and clear
However, if your son has PRE-PAYMENT PENALTY for two years, He needs to pay the penalty if his going to refy w/ in less than 2 years,
If your son doesnt have PPPenalty, well its good, the lender wont charge him of any penalty. But as per my experience most ARM's now has pre payment penalty, and usually its 10% of the loan amount, but still depends on the contract if how much the prepayment penalty is. Just read the contract just to make sure about the prepay.
Be carefull when refinancing because there's a lot of Brokers who are not licensed and they all say they can help you get a lower rate and lower your payment drastically but in the end, you will noticed that there's a big difference in the rates that they've promised, sometimes they will quote you lower rates but the TRUTH was its really high. So be carefull.
FYI. Make sure that your son will not permit anybody to run his credit, because everytime you run your credit, it loses FICO SCORE.
Only give permissions to run the credit to LICENSED LOAN OFFICERS OR TO DIRECT LENDERS ONLY not to BROKERS. Or he can run his credit himself, go online, but im not sure about the site, run his credit there and make sure he has a printed copy afterwards, so when your son will go on shopping for the rates, at least he has black and white copy or his credit reports(fico) the lenders/LO doesn't need to run his credit over and over again.
Why not refinance your mortgage and invest the equity?
Why not take equity out of your home from refinancing and put that into an investment vehicle that earns you interest? Considering that home equity doesn't earn you any rate of return, wouldn't this be beneficial?
It depends on the interest rate you'd pay on the mortgage, reduced by the tax effects assuming it it deductible, and the return you'd get on the investment, reduced by the taxes you'll pay on the gains.
Once you know that, you have to factor in the risk of the investments not working out, or the likelihood of the interest increasing if it is adjustable.
Personally, I don't think it's very smart.
Good luck...
is it wise to refinance your mortgage to payoff a debt?
If I could keep my mortgage payment the same or alittle less, yet refinance enough to pay off a large credit card debt. I can't afford the make the cc payments much longer, is that wise?
if you have a lot of debt it could be beneficial. credit card debt at 20 %or refi debt at 5%. it can save alot of money.
You are just moving debt from one place to the other.
If you refi --- then what happens if you can't pay off the debt?
You lose your home.
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Can you still refinance if your verification of mortgage comes back bad?
I have payed my mortgage late a few times two of which were 31 days late... I forgot! But, my mortgage broker is just waiting on my VOE from my current mortgage company to close on my refinance, but he said he talked to them and they said I haven't made any late payments, and I know I have. Can I still refinance?
Don't tell anyone you made late payments, it usually takes awhile for it to register on your credit report. Once it does register, unless the refinance is done before then, your interest rate will usually go higher. DON'T BE LATE ON ANY PAYMENTS, IT WILL ALL SHOW ON YOUR REPORT SOONER OR LATER!!
The better you are paying your bills on time, the better rates you get on thing you really want that cost alot like homes, cars, boats etc. The better rate you get the lower your payments will be, so stay ahead of the game. Never give out more info than is asked for because they will pull your credit report anyway and just about everything always shows up on it . If something bad is not on it yet, you could be putting your foot in your mouth. Also don't let just anyone pull your credit report, everytime someone does, it DROPS the credit report score. Yes you can still refinance. Good Luck!!
is it possible to refinance a heloc without refinancing your first mortgage?
I have a good rate with my first mortage at 4.25 fixed for 15 years. I also have a heloc that is adjustible and is at about 8.5 percent right. I would like to refinance the heloc without loosing the rates on the 1st. Is there such a thing?
yep....it's called a 2nd mortgage
Actually, trying to refinance your first and keep a Heloc is much more complicated. The Heloc lender would have to agree to subordinate their lien.
Are you thinking of refinancing from a Heloc to a fixed rate 2nd? Remember the Fed just cut short term rates, so Prime is already down .5% and more cuts are possible.
You can also try a major bank or credit union. Your rate should have gone down about .50 % with the recent rate cut, but there is no guarantee that rates won't go back up again.
Good Luck
Open Book Advisors
Is it possible to refinance your mortgage or get a home equity loan if you have been in your house for 6 month
I want to see if I can lower my monthly payments.
My question to you is why? What is driving you to refinance your rates or apply for a loan after 6 months of living in the house?
How much of a decline should you have when wanting to refinance your mortgage?
what is the best way to determine if it is a good time to refinance your mortgage?
especially if you're on a five year adjustable rate?
It's a comparison of a few different numbers.
(1) The cost of the refinancing. You can get this for free from a lender, or you can look at your previous mortgage for a ballpark figure of how much it will cost. Some banks do "no-cost refinancing" which costs you nothing, but doesn't get you the best possible rate.
(2) The difference in the interest rates *times* your mortgage amount. So if you're looking to lower your rate by 1.5%, for example, on a $300k mortgage, then this number is $4500. That's how much money you'll save per year.
(3) Now divide (1) by (2). That's how many years it'll take to "break-even", after which you'll make money on the decision to refinance. Typically I recommend that people should be fairly certain that they're not going to move for *twice* as long as this number -- because they only *break even* after (1)/(2) years, and you want to refinance only if you're reasonably sure that it'll be a financial advantage for you.
There are other smaller factors like your tax rate, your other itemized deductions, your investment retun on the money you would otherwise spend on the re-finance -- but there's smaller variables than the ones mentioned above.
Good luck,
Doug
refinance your mortgage - News
Obama's foreclosure fix on the way
ABC News The higher limit, which was in effect last year, is designed to help those with larger mortgages refinance into more affordable loans and to make it easier Obama faces massive scope of foreclosure crisis
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When is it time to refinance your mortgage? - St. George Daily Spectrum When is it time to refinance your mortgage? State taxes should also be considered if your state allows a deduction for home mortgage interest. For example, Tim originally borrowed $103000 for 30 years |
When NOT to refinance your home - ABC Action News
Business GazetteWhen NOT to refinance your home In some cases, a mortgage refinance makes sense. In other cases, it may be more prudent to stick with your current mortgage. Before deciding whether to January's Refinancing Boom Slows Down Mortgage Q&A: Financing strategy in new times Housing Crisis: You Asked, She Answered
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Industry Insider Tips from Residential Finance Corp: Clean Up Your ... - Business Wire (press release) Industry Insider Tips from Residential Finance Corp: Clean Up Your Residential Finance Corporation (RFC) is the nation’s premier home mortgage lender specializing in FHA mortgage refinance. Founded in 1997 and now serving |
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Bail Yourself Out They also look for a special hardship letter detailing why the mortgage payment has become an insurmountable obstacle. Car loans can be refinanced, too, |