Posted on: 14th Feb, 2009 12:55 pm
Seemed like a simple idea.
Details:
I am in 5th year of a 20 year note. When the home was purchased here in Texas, we put 20% down.
I usually plan for major repairs in advance, but this year between Hurricane Ike and the age of the property I had several things come up:
1. AC Unit dead - summer in Houston is not fun without one of these ..LOL
2. Pool DE Filter died and these cost about as much as AC Unit listed above
3. 5 years of 4 dogs and a toddler has not been to kind to the flooring
4. Wife says she wants a new countertop in the kitchen. Wanta coulda shoulda ...
Roughly this is going to be about $12,000. My thought was o.k., rates are low, why not re-fi and pull 10% of the equity out and lump my payments into 1 note.
Then I went to my bank and they indicated this becomes a 2nd-lien and is subject to higher interest rates ( 9.5% while I have 6.75% now ).
We discussed a homeowner line of credit which seems reasonable, but 4K minimum withdrawal and the interest rate is not fixed, varys at a 2.49+Wall street Journal interest rate....o.k.
I read some post here.
Am I the only person that has gotten a run of bad luck with a house and wanted to refi and pull equity to make repairs/improve the property?
Would I be better just slamming everything on a credit card and re-fing to pay the credit cards off?
I'm confused about what this means. Yes, I read the posts but I don't understand why you can refi at current rates and pull equity or why it is this hard.
I do live in Texas, so I know we do things differently here for some reason...
Details:
I am in 5th year of a 20 year note. When the home was purchased here in Texas, we put 20% down.
I usually plan for major repairs in advance, but this year between Hurricane Ike and the age of the property I had several things come up:
1. AC Unit dead - summer in Houston is not fun without one of these ..LOL
2. Pool DE Filter died and these cost about as much as AC Unit listed above
3. 5 years of 4 dogs and a toddler has not been to kind to the flooring
4. Wife says she wants a new countertop in the kitchen. Wanta coulda shoulda ...
Roughly this is going to be about $12,000. My thought was o.k., rates are low, why not re-fi and pull 10% of the equity out and lump my payments into 1 note.
Then I went to my bank and they indicated this becomes a 2nd-lien and is subject to higher interest rates ( 9.5% while I have 6.75% now ).
We discussed a homeowner line of credit which seems reasonable, but 4K minimum withdrawal and the interest rate is not fixed, varys at a 2.49+Wall street Journal interest rate....o.k.
I read some post here.
Am I the only person that has gotten a run of bad luck with a house and wanted to refi and pull equity to make repairs/improve the property?
Would I be better just slamming everything on a credit card and re-fing to pay the credit cards off?
I'm confused about what this means. Yes, I read the posts but I don't understand why you can refi at current rates and pull equity or why it is this hard.
I do live in Texas, so I know we do things differently here for some reason...
hi ericm
as far as i know, when you are refinancing the property, it becomes a new loan. with this new loan you pay off the earlier loan. i did not understand why your lender said that a refinance will be a second lien on your property.
did you speak to only one lender? if yes, then i would request you to speak to some of the other lenders of your area and check what they have to say regarding your case.
thanks.
as far as i know, when you are refinancing the property, it becomes a new loan. with this new loan you pay off the earlier loan. i did not understand why your lender said that a refinance will be a second lien on your property.
did you speak to only one lender? if yes, then i would request you to speak to some of the other lenders of your area and check what they have to say regarding your case.
thanks.
yes, indeed, eric...texas is a whole different state than the others when it comes to mortgage loans. i had one experience in trying to help a borrower in texas, and it was quite confusing. it never developed into a real loan, because the property value ended up being substantially less than we had originally thought it might.
at any rate, since you're looking for $12K...i would suggest you consider a personal loan. i don't know what rates you'd pay (undoubtedly higher than 9%), but since you're having so much difficulty in obtaining a loan based on the equity in your home, it might be a valid alternative.
i would steer clear of credit card debt, inasmuch as interest rates on those are quite a bit higher, and refinancing (as you know) isn't all that easy to begin with.
at any rate, since you're looking for $12K...i would suggest you consider a personal loan. i don't know what rates you'd pay (undoubtedly higher than 9%), but since you're having so much difficulty in obtaining a loan based on the equity in your home, it might be a valid alternative.
i would steer clear of credit card debt, inasmuch as interest rates on those are quite a bit higher, and refinancing (as you know) isn't all that easy to begin with.
