I didn't get that everyone was skeptical, I got that everyone was just letting her know that the debt would then be secured by her house. More of the devil and angel on your shoulder type thing. Michelle
Got ya Michelle! With that much debt though, it would take her years and years to get ahead. If she has the equity (and sounds like she has plenty in this crazy CA market) then it is a good move to get rid of that debt and the PMI (money down the drain)!!!! Then get rid of the ones she doesn't need...just keep a few for emergencies and keep them low. New start and tax deductable. This is a make sense deal!! BTW biweekly payments will pay your mortgage off in almost half the time!!!
what is the difference if they pay it off in 30 years in a mortgage or unsecured? secondly, no one has addressed the issue that they are fha and appear to want to stay that way which means they may have to keep the MIP (its NOT pmi on fha loans). so they may not be saving money. statistics show that people who pay off cards through refinancing tend to incur the debt back, so unless you are 100% certain that you will not default on the mortgage and you won't charge again on the credit cards, DON'T DO IT! anyone trying to sell you otherwise is just looking for business...
not necessarily......you typically won't pay it off any sooner than if you made one extra payment a year.
no i don't assume "we" are all sharks (yes, i am a mortgage lender myself) however, i'm not soliciting business on a credit repair message board. i am skeptical because i do care if people are not doing the best thing for their situation. ESPECIALLY when it comes to their house. if your not a shark, post your rates and fees for someone with the OP's scores/situation.
Jenz, Just trying to help. If you read the beginning of this thread it asks if there are any CA brokers out there. I was offering FREE advice!
cash flow is the main factor in mortgage defaults. therefore, if the refinance was successful in reducing the total monthly obligation of the mortgagor, then the fact that one did or did not include personal debt is irrelevant in nature to the risk of foreclosure. if cash flow is a factor, then she is at risk of default irregardless of the refinance. the focus should be on whether or not the refinance will indeed reduce her monthly debt obligations to any new mortgagee that may be considered. whether or not one includes additional personal debt is a personal choice that has nothing to do with increasing the likelihood of future default risk outside of cash flow considerations.
Wow, I hadn't checked back in a few days and all this activity!!!! I am having no problems making any of my payments. That was not the reason I wanted to refi. I just wanted to get rid of the PMI, then I started thinking why not roll some of my debt into it too. I know that can be dangerous. I might add that most of my credit card debt is from working on my house. It was a bit of a fixer uppper when I bought it a couple of years ago and I have put many thousands of dollars into it. I guess that's why I don't feel so bad sinking this debt into my mortgage. I thought I needed a 680 for "A" paper loan. I'm glad to see that is not the case. I am close to the limits on several of my credit cards. This was the reason Chase lowered my limit from 5600.00 to 200.00. Thats right, two hundred dollars. I know I'll still have the same amount of debt but my ratios will look better (assuming they don't force me to close the accounts). The day I posted the original message I had an offer in the mail to refi. I called them and they seemed to think I would be ok. I checked them out on the DRE website and they had no complaints filed against them. I'm not sure how else I can check them out. I went ahead and gave them my social security number and other info. They said they can help me so we'll see. Sheila, I appreciate your offer to look things over. If they can't help me I will definitely get in touch with you. I also have a friend that has been trying to buy a house. She has been turned down by everybody (she is not going through a broker, just going through banks & Countrywide, those type places). She had a couple of late mortgage payments almost 2 years ago now and a recent collection which is an error she is trying to clear up. She was hoping to go VA or a no down conventional. Do you think a broker could help her if the mortgage companies are denying her? By the way, according to this company my payment will only go up 300.00. I'm getting a slightly lower interest rate and getting rid of PMI. Plus I guess it will be tax deductable (I'm not sure what that meant "as long as she hasn't taken cash out in the last year it will be deductable". I'm also thinking about taking out another HELOC after this. I don't want to use it for anything. I just want to have it available. Is this a good idea?
maer - there are still several factors that have not been addressed. however, based on national averages - a prime 30 year fixed rate is @ 5.26 (bankrate.com) right now. that means a fair broker based rate on a 1st lien refinance will be anywhere between 5.25 - 5.75 depending on source of funds. if you are indeed deemed a conforming prospect (a paper) then you will want a "par" rate. this means that the broker will make their commission in the form of an "origination" fee and not derive any additional fees from the "upsell" of the interest rate. mid 600's would qualify you for conforming where i live (texas). however, other factors such as number of tradelines, collections or judgements, debt ratio, condition of collateral, length of emplyment, etc. i know of a lender in burlingame ca. that offers low "a" paper rates. they are a wholesale mortgage organization. this means that brokers go to them for mortgage funding for their clients. good luck! * i have no info. on helocs. the banks with branches do most of that business in texas. Provident Funding - Burlingame California 1575 Bayshore Highway, Burlingame CA 94010 - Map Real Estate Loans Home Mortgage Loan
Thanks for the info Robinhud. I have not yet received the paper listing all the fees that I'm looking at (the name of it escapes me at this minute). I know the interest rate was 5.75% for a 30 year fixed. As for my credit, I have no liens, judgements, collections, none of that. I do have a 7 1/2 year old b/k 7 though. I also have a high debt ratio. My scores according to the broker I spoke with are 630/650/635. I'm not sure which belongs to which CRA. I do know I had just logged in to Experian and their "new" score for me was 702. What a joke!!!! I work for the state and have been for the past 15 years. My income, after my debts have been paid off, will be a little more than enough to cover the payment. I'm very curious now to see what the charges will be. I'll update you as soon as I receive it. Hopefully you'll let me know if it's out of line. Thanks
Hello Maer, Sounds like you are getting a good rate. Question...how long do you plan on staying in this house? If it's 5-7 years you may want to go a 5-7 year fixed rather than a 30 year (lower rate). What is the current value? What is the new loan..or the LTV? I ask because if you want to get a heloc you might be able to do it along with this loan at no cost. One investor automatically offers it with their approvals. It's a great loan to have to buy a car, emergencies, etc. When you get your paperwork, if you have any questions about fees or rate...let me know. I agree with Robinhood (sp) that paying origination fees with the lowest rate (par) is the best way to go...and those fees are tax deductable. I always give my borrowers an option either way. There is no such thing as a NO COST loan. Watch for application fees or admin fees (garbage fees). You want to pay origination, processing to your broker and that's it. If the broker is charging other fees (fees that will be paid to them on the top portion of the good faith estimate) than negociate with them. As far as your friend, I'd be happy to take a look at her situation. Where does is she looking to purchase? If her score are lower she will need to go subprime or perhaps FHA. There are programs to 100% with a 580 score subprime. Rates are still decent. Good luck and please feel free to email me any questions I would be happy to help you. Sheila
Thanks for the info Sheila!! I'm going to e-maiil this guy and see if he offers HELOC's. My new loan is 80% LTV exactly. After paying off my mortgage now I will be left with about 30,000.00 which should be just enough to wipe out all remaining debt I have. The loan loan will be about 203,000.00 My payment will go up about 300.00 per month. I am currently paying over 1000.00 per month on my credit card debt (I'm paying over minimum payments though). My intention is to put a couple hundred more towards principle for an earlier payoff. I plan to stay in this home forever. My dream used to be to buy a condo in orange county once I retire (in 20+ years) but I'm sure I would never be rich enough to buy there. One of the reasons I want to do a HELOC now is that I understand you can't claim child support as income if you will be getting it for less than another 3 years. Come June, I will have exactly 3 years left for one of my children (6 years left for the other). I figure it will be easier for me to qualify now. I'm also going to buy a new car towards the end of this year and would love to have that as a back-up. I've told my friend several times to go through a broker rather than directly through a lender. For some reason she just doesn't believe it. She's one of those people that believes you pay a premium to use a broker and you will get a much lower rate and pay significantly lower fees to go directly thru the lender. I'm still working on her though. I am just amazed that she can't get approved. Even before that collection showed up on her account, Countrywide turned her down because she had 2 mortgage delinquencies less than 2 years ago. She should be at or past the two year mark by now though. I'll see if I can get her to at least talk with you. By the way, according to the reports she pulled, her scores are mid the high 600's. Of course, who knows what they really are (mine said 702 and in actuallity they were low to mid 600's) I refinanced my last house and originally bought this house through a broker. I referred him to my boss and he totally blew it with her. That is why I'm not using him this time. I don't know why anybody would prefer to go directly through a lender.
