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Old 12-09-2012, 08:20 AM
 
532 posts, read 1,397,084 times
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I purchased a house last March, using a 62,000 HELOC on the condo I was living in, plus cash.

It cost money to fix up the house and condo; now I am also 27,000 in debt on the house (against a total HELOC line of 80,000) (Both from BOA) Total debt 89,000; interest rate 3.5% but tied to prime and variable; there were no closing costs or appraisals.

I am renting out the condo. I want to turn the total 89,000 debt into a fixed rate mortgage. Because: I may not pay it off quickly and interest rates might go up. Is this a good reason?

I spoke the woman (at BOA) who helped me get the HELOC on the house. She says the current assessed value of the house is 192,000 and the condo is 62,000. She suggest I get a 105,000 mortgage on the house, and pay off both loans.

This mortgage would have 2000 closing costs, be 4% interest and need an appraisal (cost 500.) I would also like to add that if no bad things happen (job loss, etc) I would hope to have it paid of in 5 or ten years.

Is this a pretty good deal? This young woman worked very hard to get me the 80,000 HELOC (all the tellers made a point of telling me so; I didn't have the certificate of occupancy for some time and she had to work extra.) I don't feel like shopping around for that reason, unless this is a terrible deal. My credit is 775 and I have no other debts or car loans.

Also--I read on this forum about a automated valuation model appraisal, an AVM. You can get an AVM if the loan is significantly less than the value of the home--am I a candidate for that and does that cost less than a $500 appraisal?

Also--I like the HELOC loans because I can pay off whatever I want with the secure feeling that more is there if I need it. I am taking 15,000 extra on the mortgage that I don't need, just to have some margin--can I get a HELOC at fixed rate anywhere?

Okay, a lot of questions--thank you in advance if you can help me.
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Old 12-09-2012, 09:47 AM
 
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If the numbers quoted are based on the fact this unit is not owner occupied that is a very attractive deal especially for a condo.
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Old 12-09-2012, 10:08 AM
 
Location: Eastern Colorado
3,757 posts, read 4,412,447 times
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4% on an owner occupied property is high especially with $2000 in closing costs and paying for the appraisal.
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Old 12-09-2012, 01:48 PM
 
532 posts, read 1,397,084 times
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Quote:
Originally Posted by jwiley View Post
4% on an owner occupied property is high especially with $2000 in closing costs and paying for the appraisal.
It is owner occupied--it is my house. She says the reason it is so high is because I am not refinancing; I am 'taking money out."

What would be a good rate? Should I look around?
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Old 12-09-2012, 02:19 PM
 
Location: Ashburn, VA
989 posts, read 2,395,788 times
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You are doing a cash out refinance. I though rates were currently below 3.5% for fixed but I could be wrong. I agree that you should take a mortgage out on the house to consolidate both debts. If you are planning on paying it off within 5-10 years you could check Penfed- they have a 5/5 ARM that is at 2.75% with no closing costs. The rate only resets every five years. If you're not a member you can "buy" your way in with a membership in a partner organization-check their website. That's probably what I'd do.
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Old 12-09-2012, 02:56 PM
 
532 posts, read 1,397,084 times
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Quote:
Originally Posted by mdcrim View Post
You are doing a cash out refinance. I though rates were currently below 3.5% for fixed but I could be wrong. I agree that you should take a mortgage out on the house to consolidate both debts. If you are planning on paying it off within 5-10 years you could check Penfed- they have a 5/5 ARM that is at 2.75% with no closing costs. The rate only resets every five years. If you're not a member you can "buy" your way in with a membership in a partner organization-check their website. That's probably what I'd do.
Thanks for the reply and the suggestion. The problem is, 5-10 years pay back is ideal. Life has thrown a few curves lately, so I am a little risk adverse. I feel like I want a fixed rate.

Plus, I think my opening post was too detailed , a fault of mine. Let me try again

I owe 62,000 on a HELOC on a tenent occupied condo

I own my house, assessed at 192,000; I owe 27,000 on a HELOC.

Both HELOC's are from BOA; both are variable interest, currently 3.5%.

I want to turn the HELOC's into a fixed rate 105,000 mortgage on my owner occupied house.

This is because I worry about the HELOC's--should I?


BOA offered 4% and 2000 closing cost, plus 500 appraisal fee.
I feel a little bad switching away from BOA , after a young loan officer worked hard to get me the HELOC on my house, but if the terms are no good, I will.


My credit is 775; I have no other debts; I have a fairly moderate income; nothing grand.
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Old 12-09-2012, 03:11 PM
 
28,393 posts, read 68,104,404 times
Reputation: 18202
Your first post was confusing, you said "I am renting out the condo" and I thought that was the only factor.

Right now you could almost certainly get a mortage at better than 4% -- if you can afford the payment on a 15 yr mortgage you could save a considerable amount with rates under 3%...

It is UTTERLY NUTS to "feel sorry" for the clerk at BOA -- beleive me they are NEVER going to feel that way about you!!
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Old 12-10-2012, 05:23 PM
 
Location: Ashburn, VA
989 posts, read 2,395,788 times
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I agree that you don't owe the loan officer anything. Especially since she's not doing you any favors on the rate. Even for fixed rate, I would check out Penfed and a few others to shop around (maybe Navy Federal if you can qualify?). Also, check out Costco- we did two refinances through them this past year (with Weststar Mortgage). Good luck!
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Old 12-11-2012, 10:55 AM
 
532 posts, read 1,397,084 times
Reputation: 339
Quote:
Originally Posted by chet everett View Post
Your first post was confusing, you said "I am renting out the condo" and I thought that was the only factor.

Right now you could almost certainly get a mortage at better than 4% -- if you can afford the payment on a 15 yr mortgage you could save a considerable amount with rates under 3%...

It is UTTERLY NUTS to "feel sorry" for the clerk at BOA -- beleive me they are NEVER going to feel that way about you!!
Quote:
Originally Posted by mdcrim View Post
I agree that you don't owe the loan officer anything. Especially since she's not doing you any favors on the rate. Even for fixed rate, I would check out Penfed and a few others to shop around (maybe Navy Federal if you can qualify?). Also, check out Costco- we did two refinances through them this past year (with Weststar Mortgage). Good luck!
Thanks to both of you. It seems the deal is very bad. I can't take it if it is bad. I will shop around. I will look at penfed and Costco right away. Another suggestion I got is to look at my work and community credit union.

Thank you!
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