Posted on: 07th Jun, 2010 12:35 am
i'm hoping refinance the mortgage on my single family home (primary residence). i currently have 2 loans: $400k at 5.5% (30 yr fixed) and heloan 160k at 7.0% (30 yr fixed). i will not be taking cash out so the amount i plan to refinance is the current total balance (400+160=$560k).
my home would appraise at no less than $800k so my ltv is 70% (560/800=0.7). i was initially told that i could get $560k at 5% (30 yr fixed). i am in a high cost area (san francisco) so i can borrow up to $729,750
the next day i was told by my bank that in order to refinance my two loans into one loan i would need a 60% ltv. therefore the maximum that i can refinance is $480k. they said it's a fannie mae rule. is it true that fannie requires a ltv of 60% when refinancing 2 loans into one loan?
my home would appraise at no less than $800k so my ltv is 70% (560/800=0.7). i was initially told that i could get $560k at 5% (30 yr fixed). i am in a high cost area (san francisco) so i can borrow up to $729,750
the next day i was told by my bank that in order to refinance my two loans into one loan i would need a 60% ltv. therefore the maximum that i can refinance is $480k. they said it's a fannie mae rule. is it true that fannie requires a ltv of 60% when refinancing 2 loans into one loan?
As far as I know, according to the Fannie Mae rules for second homes and/or investment properties, purchase or refinance, the allowed LTV is 60%. You have mentioned that your property is your primary residence. In that case, this rule will not come into effect while you refinance the loan.
It sounds to me that the current lender you're working with doesn't have a product for your scenario. Do your research! I know of several lenders/investors that can fund your loan.
the maximum ltv for cash out is 60% for fnma high balance conforming loans.
if the second mortgage was not acquyaired at purchase along with the first mortgage, it is considered a cash out refinance. besdies maximum ltv of 60%, maximum cash out allowed may be $100,000 and your second mortgage is higher.
combining a first and second mortgage is rate and term refinance if both were acquired at the same time at purchase.
you would have to determine if advantageous, but, you could do an fha first mortgage and combine them as fha counts it as rate and term
if the second mortgage was not acquyaired at purchase along with the first mortgage, it is considered a cash out refinance. besdies maximum ltv of 60%, maximum cash out allowed may be $100,000 and your second mortgage is higher.
combining a first and second mortgage is rate and term refinance if both were acquired at the same time at purchase.
you would have to determine if advantageous, but, you could do an fha first mortgage and combine them as fha counts it as rate and term
Original poster here.
Thanks for the replies. After asking another lender I did find out that since the 2nd was not from the initial purchase it was considered cash out. So the 60% LTV applies. John Veenstra was right on the money.
Thanks for the replies. After asking another lender I did find out that since the 2nd was not from the initial purchase it was considered cash out. So the 60% LTV applies. John Veenstra was right on the money.