Posted on: 04th Apr, 2009 05:37 am
I purchased a home 10 years ago from my neighbor. He financed for me as my credit was very weak at the time. My wife and I now have scores hovering around 700. My interest rate 10 years ago was 8.75 (not bad for then). I would like to get a lower rate if possible and also get $20,000.00 for home improvements. I have never had the home appraised but the insurance company requires me to have it insured for $92,000.00. I purchased the home for $60,000.00 in 1999 and currently owe around $53,000.00. Is this request feasible and if so what are my next steps? Quite frankl, these kind of matters really scare me because I don't want to make a wrong move. Thanks for responding.
If your home appraises near your insured value and your debt to income ratios are OK, getting a mortgage with some (maybe even $20K) cash should not be a problem. First, I would go online and search for Free home value or what is my home worth. (Ideally you want a loan at or under 80% for the best deal.) That should tell you whether you are in the ball park. If that goes OK, I would contact a good mortgage broker to find you the best deal possible. You should take advantage of the low rates now as your private note rate is pretty high. Lastly, ask lots of questions to your mortgage broker. If they aren't responsive, find another broker but don't let too many pull your credit.
you can go to zillow.com for a value check and you can also ask a friendly local realtor to give you an estimate of value.
as for a new mortgage, you can go up to 85% of the value of your home, with a cash out refinance, on an fha loan. with conforming loans, you'll pay additional charges for cash-out as well as a credit score under 740 (in many cases, at least).
check out both options - fha and conforming - and pick the one that fits you best. also, have your seller (the person holding your current mortgage) provide you with a reference letter stating how you handled your payments on that loan.
go for it, and don't be nervous about "these kind of matters."
as for a new mortgage, you can go up to 85% of the value of your home, with a cash out refinance, on an fha loan. with conforming loans, you'll pay additional charges for cash-out as well as a credit score under 740 (in many cases, at least).
check out both options - fha and conforming - and pick the one that fits you best. also, have your seller (the person holding your current mortgage) provide you with a reference letter stating how you handled your payments on that loan.
go for it, and don't be nervous about "these kind of matters."
