Posted on: 19th Mar, 2009 07:59 pm
Due to some kind of major malfunction with my accountant, it turns out I owe $12,500 on taxes on April 15. I don't have that money. So I called Bank of America to see if I could refinance/cash out.
I bought this house (in Texas) last August, for $121,500, and I put $46,500 down. When I called Bank of America, they said they would be happy to refinance. However, the next day they called and they said they could not, because "Texas law requires that refinancing requires a minimum 720 credit score".
Is that true? It seems strange, cause they *did* run my credit score when I first called, and it was after they saw my credit score that they said they could help me - but then the next day they claimed some kind of clerical error.
Ok, second question - would it be smart to refi/cash out to use the money to pay my tax debts, or would it be better to leave my mortgage alone (30-year fixed at 6.5), and just go on a payment plan with the IRS?
I bought this house (in Texas) last August, for $121,500, and I put $46,500 down. When I called Bank of America, they said they would be happy to refinance. However, the next day they called and they said they could not, because "Texas law requires that refinancing requires a minimum 720 credit score".
Is that true? It seems strange, cause they *did* run my credit score when I first called, and it was after they saw my credit score that they said they could help me - but then the next day they claimed some kind of clerical error.
Ok, second question - would it be smart to refi/cash out to use the money to pay my tax debts, or would it be better to leave my mortgage alone (30-year fixed at 6.5), and just go on a payment plan with the IRS?
Guest,
Not sure about Texas laws, but that seems strange. I'd call around to a couple different brokers in that area and see if they all say the same thing. It could be that they don't allow CASH OUT refi's under 720 credit. But that's just a guess.
As far as refiing, YES, you SHOULD. If you can. Depending on your qualifications, rates right now are as low as 4.5. Not only would this reduce your monthly payment alone but if you included your taxes you would be done with the government. :)
Let me know if you have any additional questions and I will help you the most I can!
Not sure about Texas laws, but that seems strange. I'd call around to a couple different brokers in that area and see if they all say the same thing. It could be that they don't allow CASH OUT refi's under 720 credit. But that's just a guess.
As far as refiing, YES, you SHOULD. If you can. Depending on your qualifications, rates right now are as low as 4.5. Not only would this reduce your monthly payment alone but if you included your taxes you would be done with the government. :)
Let me know if you have any additional questions and I will help you the most I can!
Hi pancho,
In order to refinance a conventional loan, you would require a credit score of 700-720. I would suggest you to contact other lenders and check out whether they can help you. You can also contact the lenders of this community and seek a no obligation free mortgage consultation from them. This will help you in knowing the rates and terms which you can expect to get.
In my opinion, a payment plan with the IRS is a better option than refinancing the loan to pay off the taxes. However, if you can afford a refinance, then you can go for it. You should remember that you will have to pay the closing costs when you refinance the property.
In order to refinance a conventional loan, you would require a credit score of 700-720. I would suggest you to contact other lenders and check out whether they can help you. You can also contact the lenders of this community and seek a no obligation free mortgage consultation from them. This will help you in knowing the rates and terms which you can expect to get.
In my opinion, a payment plan with the IRS is a better option than refinancing the loan to pay off the taxes. However, if you can afford a refinance, then you can go for it. You should remember that you will have to pay the closing costs when you refinance the property.
Hi
This thread has solved mine problem also.
Could you please suggest some website that really guides a way to good credit score?
[External linking deleted as per forum rules. Thanks.]
This thread has solved mine problem also.
Could you please suggest some website that really guides a way to good credit score?
[External linking deleted as per forum rules. Thanks.]
Welcome mickbali,
You can check out the given page to know some steps to improve your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html
You can check out the given page to know some steps to improve your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html
one way to improve your CS is a secured credit card - a good first step anyway.
myfico.com has some very good tips. but please don't buy any products - they are wasteful, i feel. they charge you $15.95 just to get your score - a creditor will usually do that gratis.
