Posted on: 07th Sep, 2007 02:16 am
we had earlier taken a 20 year fixed fha loan at 5.75%. it is only now hat we feel we should take out a home equity loan for $20,000 and pay off our credit debts but the loan officer insists that w edo a refinance. is that a feasible option? he is saying that interest rates may be high but it will be offset because we aren't paying pmi. any idea??
refinance will not be a good option as there is a lump sum closing cost involved, better go for home equity loan.
Hi Liza,
Though your lender has said that you don't have to pay PMI if you refinance the FHA loan, but you may have to pay FHA insurance on it. FHA insurance is paid to lenders to protect them from losses that may result from defaults on loans by borrowers.
Though your lender has said that you don't have to pay PMI if you refinance the FHA loan, but you may have to pay FHA insurance on it. FHA insurance is paid to lenders to protect them from losses that may result from defaults on loans by borrowers.
How long have you had your current mortgage?
Get rate quotes on Equity loans and 1 New Mortgage
Heres what you need to know.
1. What is the new payment for 1 loan =
2. Take your current payment and ADD the new equity payment =
3. Now here is the tricky part take the 1 loan payment and MULTIPLY by 360 or 240 depending on 30 or 20 year loan.
4. Take your current payment and MULTIPLY by your remaining payments add the Equity loan and MULTIPLY by its payment terms
This way you can see what the total costs of both scenarios will be. If it is less expensive to pay 1 loan then do it but if you save money or have already had your current mortgage for a while it might not be worth it.
If you have any questions about this formula provide me the actual numbers and payments you are going off of and I will break it down for you.
Get rate quotes on Equity loans and 1 New Mortgage
Heres what you need to know.
1. What is the new payment for 1 loan =
2. Take your current payment and ADD the new equity payment =
3. Now here is the tricky part take the 1 loan payment and MULTIPLY by 360 or 240 depending on 30 or 20 year loan.
4. Take your current payment and MULTIPLY by your remaining payments add the Equity loan and MULTIPLY by its payment terms
This way you can see what the total costs of both scenarios will be. If it is less expensive to pay 1 loan then do it but if you save money or have already had your current mortgage for a while it might not be worth it.
If you have any questions about this formula provide me the actual numbers and payments you are going off of and I will break it down for you.
Thanks for the great info Livinginnky.
I am yet to discuss the payments with the lender. let me do that, possibly we'll ahve a meeting tomorrow and then i can give you the details.
I am yet to discuss the payments with the lender. let me do that, possibly we'll ahve a meeting tomorrow and then i can give you the details.
"We had earlier taken a 20 year fixed FHA loan at 5.75%. it is only now hat we feel we should take out a home equity loan for $20,000 and pay off our credit debts but the loan officer insists that w edo a refinance. Is that a feasible option? He is saying that interest rates may be high but it will be offset because we aren't paying PMI. Any idea??"
How much the first loan was for Liza?
Whether you would be able to take a HEL (home equity loan) will depend on how much equity exists in your home presently.
And with refinancing also, to take cash out, there should be enough equity in the house.
So there are few things to look into before deciding about taking a HEL or do cash out refinance.
Miller
How much the first loan was for Liza?
Whether you would be able to take a HEL (home equity loan) will depend on how much equity exists in your home presently.
And with refinancing also, to take cash out, there should be enough equity in the house.
So there are few things to look into before deciding about taking a HEL or do cash out refinance.
Miller