Posted on: 24th Aug, 2010 08:19 pm
we owe a fisrt mortgage of $350,000 on our home that was just appraised at $500,000 in northern california. we also owe a family member about $135,000 on our home through a second mortgage. our goal is to pay off the family member now.
we are planning to refi on a basic 30 yr loan to get cash out to pay a portion of the $135,000 plus some other cash we have on hand. our new first will be for $400,000 exactly 80/20. this will leave a balance of about $65,000 to go on paying off the family member.
what is our best option for securing a fixed rate loan for the remaining $65,000? we have good credit and debt to income after incorporating the $65,000 would be around 37% (im guessing). will banks do a second for about 93% of the value of the home? are we stuck with a heloc and how does that work? personl loan? options?
we are planning to refi on a basic 30 yr loan to get cash out to pay a portion of the $135,000 plus some other cash we have on hand. our new first will be for $400,000 exactly 80/20. this will leave a balance of about $65,000 to go on paying off the family member.
what is our best option for securing a fixed rate loan for the remaining $65,000? we have good credit and debt to income after incorporating the $65,000 would be around 37% (im guessing). will banks do a second for about 93% of the value of the home? are we stuck with a heloc and how does that work? personl loan? options?
Hi cashew,
You can contact the local lenders and apply for a fixed rate loan for the equity of $65,000. However, the banks won't give you a second home loan for about 93% of the home value. I don't think you're stuck with the HELOC. The cash out that you receive from refinancing will help you in paying off the HELOC.
Thanks
You can contact the local lenders and apply for a fixed rate loan for the equity of $65,000. However, the banks won't give you a second home loan for about 93% of the home value. I don't think you're stuck with the HELOC. The cash out that you receive from refinancing will help you in paying off the HELOC.
Thanks
when you refinance, you are required to payoff all liens on the property. unfortunately, you can't just pay off your 1st mortgage, take cash out, and leave the 2nd mortgage open (unless the family member is willing to subordinate.) you are at 97% ltv here.
you could work something out with the family member to discount the payoff or unsecure a portion of the loan so that you can refinance. for example - when the bank gets the payoff from them they lower it to 75k (whatever the number is that you need) and then the other 60k is made into a new note that is to be repaid over whatever time you agree upon- but it can't be in the form of a 2nd mortgage.
most likely the max you are going to get is 85% (that is fha high balance program.) you have to take closing costs and mortgage insurance into consideration as well.
good luck, message me if you want me to take a look.
you could work something out with the family member to discount the payoff or unsecure a portion of the loan so that you can refinance. for example - when the bank gets the payoff from them they lower it to 75k (whatever the number is that you need) and then the other 60k is made into a new note that is to be repaid over whatever time you agree upon- but it can't be in the form of a 2nd mortgage.
most likely the max you are going to get is 85% (that is fha high balance program.) you have to take closing costs and mortgage insurance into consideration as well.
good luck, message me if you want me to take a look.