Posted on: 31st Jan, 2011 07:16 am
i bought my first home fha, about 5 months ago. i bought it for 55,000 and it appraised at 59,000. however, i was give $5,000 in give equity from my father as that is who i bought it from. does that gift equity mean that i have roughly $9,000 in equity currently. i know if i refinance, unless to a 15 year i wouldn't get a better interest rate since it is at 4.5% currently. i have some debt, especially a car payment that is killing me that i would like to get rid of. if there any scenerio that i have explained that would allow me to take care of some of this debt, even if my house payment goes up just a little? thanks for the insight!
Hi K, refinancing is probably not in the cards for you.
Most lenders 1)require that you have between 6-12 months of mortgage payments before they will consider a cash out refinance. 2) An equity position of 80% or better (based on your $55k value that would be $44k and you already owe more than that.
Good luck!
Most lenders 1)require that you have between 6-12 months of mortgage payments before they will consider a cash out refinance. 2) An equity position of 80% or better (based on your $55k value that would be $44k and you already owe more than that.
Good luck!
Thanks Greg, Say in a year my house appraised for 62,000, and dropped my loan length to 15 yrs, there isn't a way to just wrap that debt into my new mortgage? My mortgage guy told me to call him in a year and he could do something like this, is this the same as a cash out refinance?
K, sounds like you're trying to do two things. 1) Put your loan on a 15 year term 2) Get cash to pay off other debt.
Addressing #2 first - To figure out where you need to be for equity is not a time lapse but a market condition. If over the course of the next year, your home increases in value enough to consolidate the debt (that's the cash out) then a refinance may be possible.
The easiest way to figure out where you need to be is take your loan balance plus the total of the debt you want to pay plus another 3-5% for closing costs and divide that sum by .8, which will give you the minimum value you need.
#1 - Rather than refinance now to a 15 year loan and then perhaps be looking at it again in a year, Google "amortization programs" and then use the payment calculator to help you decide how much to add to your current payment to get you to 15 years.
Addressing #2 first - To figure out where you need to be for equity is not a time lapse but a market condition. If over the course of the next year, your home increases in value enough to consolidate the debt (that's the cash out) then a refinance may be possible.
The easiest way to figure out where you need to be is take your loan balance plus the total of the debt you want to pay plus another 3-5% for closing costs and divide that sum by .8, which will give you the minimum value you need.
#1 - Rather than refinance now to a 15 year loan and then perhaps be looking at it again in a year, Google "amortization programs" and then use the payment calculator to help you decide how much to add to your current payment to get you to 15 years.
To consolidate debt with the refinancing of the mortgage is a cash out refinance.
The maximum loan to value for an FHA cash out refinance is 85%.
So, if house value is $62,000, then the maximum cash out mortgage amount would be 85% of that which is $52,700. That would have to cover your existing mortgage balance pay off, closing costs and what is left could be put toward paying off the auto loan. I can only guess. Looks like with that value you may have about $1,000 to pay off a car loan. Probably does not work.
The maximum loan to value for an FHA cash out refinance is 85%.
So, if house value is $62,000, then the maximum cash out mortgage amount would be 85% of that which is $52,700. That would have to cover your existing mortgage balance pay off, closing costs and what is left could be put toward paying off the auto loan. I can only guess. Looks like with that value you may have about $1,000 to pay off a car loan. Probably does not work.
