Posted on: 25th Sep, 2007 07:27 pm
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I will try to keep this brief, and to the point, but at the same time as detailed as possible.
My hubby and I desperately need to refi our current mortgage. We fell behind on our taxes (not escrowed), so the mortgage company advanced our taxes and is now forcing us to start an escrow account. Our once 1600 mortgage payment is now 2600. If we don't do something, we are going to loose the house.
Here is the problem with a refi. We were recently turned down. My hubbys mid is 471. He has 2 IRS leins against him (they are from a false filing by his ex wife, but the IRS says nothing they can do). We do have a rolling 30 day late on the mortgage (Hubby was out of work with a non work related injury), and of course, as our luck would have it, shortly after we caught up, we had another late because our bank acct. was frozen from the IRS.
We just had our appriasal done and it came back at 230k. We were hoping to borrow around 210k to pay off IRS and other miscellanous debts. My hubby has been at the same employer for 15 years and has a pension worth around 60k.
We are currently trying with a second lender, but it doesn't look good with them.
Any suggestions? Recommendations? Words of wisdom?
I will try to keep this brief, and to the point, but at the same time as detailed as possible.
My hubby and I desperately need to refi our current mortgage. We fell behind on our taxes (not escrowed), so the mortgage company advanced our taxes and is now forcing us to start an escrow account. Our once 1600 mortgage payment is now 2600. If we don't do something, we are going to loose the house.
Here is the problem with a refi. We were recently turned down. My hubbys mid is 471. He has 2 IRS leins against him (they are from a false filing by his ex wife, but the IRS says nothing they can do). We do have a rolling 30 day late on the mortgage (Hubby was out of work with a non work related injury), and of course, as our luck would have it, shortly after we caught up, we had another late because our bank acct. was frozen from the IRS.
We just had our appriasal done and it came back at 230k. We were hoping to borrow around 210k to pay off IRS and other miscellanous debts. My hubby has been at the same employer for 15 years and has a pension worth around 60k.
We are currently trying with a second lender, but it doesn't look good with them.
Any suggestions? Recommendations? Words of wisdom?
Different lenders have different lending criteria. So, even if your husband has been denied refinancing with a lender, he should go on trying with a different lender.
Hi Spidereclipsegrl,
To pay off the IRS, you can take a loan from your 401(k) account. This type of loan is useful as they allow you to borrow cash from your retirement savings account but do not charge taxes on the interest until retirement. This type of loan also does not require you to have a good credit profile. Moreover, the interest rates charged on these loans are comparatively low. But before considering this type of borrowing, you should know about its advantages and disadvantages. To know about these, you may refer to http://www.mortgagefit.com/401k-403b-loans.html
To pay off the IRS, you can take a loan from your 401(k) account. This type of loan is useful as they allow you to borrow cash from your retirement savings account but do not charge taxes on the interest until retirement. This type of loan also does not require you to have a good credit profile. Moreover, the interest rates charged on these loans are comparatively low. But before considering this type of borrowing, you should know about its advantages and disadvantages. To know about these, you may refer to http://www.mortgagefit.com/401k-403b-loans.html
What your credit looks like? Are you on the current loan? Have you been employed for the past 2 years? Can you borrow against your husbands pension/401k to take care of the past due mortgage ammount and to take care of tax liens and to catchup on your escrow account? What lenders have you applied with? Get a coppy of credit report so that new lenders wont put more inquiries on your credit further damaging the score. With 471 score for your husband you cannot get a 90%-95% loan wich is what you trying to do. Almost any mortgage loan today will want a 560+ score.
Thanks so much for everyones input....The lender that we are trying to work with right now seems to think we may have a shot with FHA....We can fully document our late payments with medical proof, employer proof, etc....As far as getting a loan with 401k, we can't really do it....It is a government pension....The interest rate is 8 %, and has to be paid back over 3 years (good old NJ making that mandatory)...The payments on that would be much more than refinancing and taking out the cash needed from a refi...As far as I go, I haven't had an open tradline on my credit in over 5 years, so I guess it is safe to say "no credit" for me...I haven't worked on the books in 3 years...We applied with precision one funding, and fidelity mortgage bankers...Both said no go...What frustrates me the most is that the other broker ordered our appraisal, we paid for it, and now if we can't get the mortgage, I blew $375 for nothing...
Hi Spydereclipsegrl,
Welcome back.
If you have fallen behind on your taxes, why did you your mortgage company advanced the unpaid tax? Did you request them to do so? If you haven't approached them, I think they may have done it intentionally because they might have later on decided that they'll make you open an escrow account. Then that's unfair I guess.
I can understand that you've paid for the appraisal also and now if it doesn't work for you, then that's not good. But I think you have to shop around for some more time till you get the best deal. And in the current market situation, it's really tough to get a loan at a 471 credit score. So, I guess you need to shop more or else you won't get the right deal.
As far as I can understand, refinancing with an FHA loan will be a good option and with your score, you may be able to achieve that. Other than this, there are conforming loans which aren't score driven. Have you spoken to any lender about conforming loans?
Good luck
Welcome back.
If you have fallen behind on your taxes, why did you your mortgage company advanced the unpaid tax? Did you request them to do so? If you haven't approached them, I think they may have done it intentionally because they might have later on decided that they'll make you open an escrow account. Then that's unfair I guess.
I can understand that you've paid for the appraisal also and now if it doesn't work for you, then that's not good. But I think you have to shop around for some more time till you get the best deal. And in the current market situation, it's really tough to get a loan at a 471 credit score. So, I guess you need to shop more or else you won't get the right deal.
As far as I can understand, refinancing with an FHA loan will be a good option and with your score, you may be able to achieve that. Other than this, there are conforming loans which aren't score driven. Have you spoken to any lender about conforming loans?
Good luck
hi,
If you have IRS lien against your property, you may be able to refinance only to lower down the interest rate but cannot get cash out. It is better to remove the lien before refinancing to get a clear title. There is another option for you. You may approach specific lenders who will help you to obtain Lien Subordination from IRS by which this lien is made secondary
If you have IRS lien against your property, you may be able to refinance only to lower down the interest rate but cannot get cash out. It is better to remove the lien before refinancing to get a clear title. There is another option for you. You may approach specific lenders who will help you to obtain Lien Subordination from IRS by which this lien is made secondary
Spidereclipsegrl,
With a 471 mid score (with or without an IRS Lien) refinance is probable to maybe 1%. And it make no difference what "your" credit score is UNLESS you don't need your husbands income to support the loan. If you need both of your incomes; the lender will look to the "lowest" score.
As far as the FHA; we work with homeowners every day across the country and this fact remains the truth...even with the latest knee jerk reaction that our government has provided regarding the FHA, if you can't qualify, you can't qualify, and you must be able to qualify for the loan through FHA. Unfortunately, 471 isn't going to get it done.
There are things to do, and you need to do them through your current lender. If you write to me off the board; we'll see what we can do to help you.
With a 471 mid score (with or without an IRS Lien) refinance is probable to maybe 1%. And it make no difference what "your" credit score is UNLESS you don't need your husbands income to support the loan. If you need both of your incomes; the lender will look to the "lowest" score.
As far as the FHA; we work with homeowners every day across the country and this fact remains the truth...even with the latest knee jerk reaction that our government has provided regarding the FHA, if you can't qualify, you can't qualify, and you must be able to qualify for the loan through FHA. Unfortunately, 471 isn't going to get it done.
There are things to do, and you need to do them through your current lender. If you write to me off the board; we'll see what we can do to help you.
Hi Jeff,
What do you exactly mean by mid score? Is it an average taken out of the three scores from the three credit bureaus?
What do you exactly mean by mid score? Is it an average taken out of the three scores from the three credit bureaus?
Loyd,
There are "the big 3" credit reporting agencies. Equifax, TransUnion, and Experian. Each of them issue credit scores. One score will be the highest of the three, another will be the lowest, and the one left over will be the "MID SCORE". Lenders look to the "mid" score for mortgages.
There are "the big 3" credit reporting agencies. Equifax, TransUnion, and Experian. Each of them issue credit scores. One score will be the highest of the three, another will be the lowest, and the one left over will be the "MID SCORE". Lenders look to the "mid" score for mortgages.
Hi Jeff,
Thank you for your information. It helped me a lot.
Thank you for your information. It helped me a lot.