Posted on: 23rd Jan, 2009 04:28 am
ran across your great site while doing some research and thought i might ask a couple questions.
we are looking to refinance while the rates are down, but i have a few concerns about what options we will have if the house does not appraise for what we need it to. a little background first:
house purchased in jan 2000 for 238,000 -- refi'd in 2002 for a lower rate appraised at over 270,000 at that time. the house next door sold for over 325,000 in 2007 and is a bit smaller than ours.
we currently owe around 197,000 and have a line of credit we would like to include of around 42,000. we both work and have credit scores of 780+ and no missed mortgage payments. a year ago i would not have worried about the value, but now we don't know. i was hoping for some insight on what options we have if it comes in under the 80% value mark.
thanks
we are looking to refinance while the rates are down, but i have a few concerns about what options we will have if the house does not appraise for what we need it to. a little background first:
house purchased in jan 2000 for 238,000 -- refi'd in 2002 for a lower rate appraised at over 270,000 at that time. the house next door sold for over 325,000 in 2007 and is a bit smaller than ours.
we currently owe around 197,000 and have a line of credit we would like to include of around 42,000. we both work and have credit scores of 780+ and no missed mortgage payments. a year ago i would not have worried about the value, but now we don't know. i was hoping for some insight on what options we have if it comes in under the 80% value mark.
thanks
if your value has decreased, which wouldn't be at all surprising, then you'd be facing a requirement for mortgage insurance if the ltv comes in higher than 80%. your loan would be considered a cash-out because you're paying off your subordinate debt, which makes some mi companies a bit leery. if, for instance, mortgage insurance could not be obtained due to your doing a cash out (and depending on ltv), you could certainly move to an fha loan, which allows you to borrow up to 95% of the value when cashing out.
One more thing that you should share with us is your current interest rate. Then, we could give you an idea as to what your savings would be if your loan to value ratio was below 80% AND what it would be if it was over 80% and you had to add PMI as George previously mentioned. You really just need to let one of us provide you with a quote.
Thanks for the replies so far. In 2000 we were at 8% and the refi in 2002 took us to 6.5%.
Jeff
Jeff
With an excellent credit score that you have mentioned, you can easily get a refinance. However, there are high chances that you will require a Private Mortgage Insurance once you refinance the loan again.
My husband and I purchased our home in 2006 and we currently have 2 mortgages 1st is 7% interest only $236,000 and 2nd is 8.94% fixed $52,000 we just tried to do a lost mitigation refi but can't because our appraisal came back at $280,000 and now we were told we can't refi. We are looking to get both loans consolidated to a fixed rate. With all these government programs going on why is it so hard for us to be able to refi?
Talk to your broker and see if you qualify for the DU Refi Plus program.
if you are worried about the potential drop in equity, why not get yourself a valuation before you go to the bank? If it comes out bad you can hold off.