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Old 06-23-2015, 09:06 AM
Status: "Here We Go Again" (set 17 days ago)
 
Location: Up Yonder
259 posts, read 446,006 times
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I have a question about refinancing a mortgage. A house had an appraisal of $102,000. There is currently a mortgage with $52,000 left on it at 6% and a home equity line of credit of $34,000 on it. Trying to get at least the primary mortgage refinanced at 4%. It got rejected because according to the bank, too much money is owed and was told it was at least $11,000 out in getting financed. Does this make sense? Having a hard time getting a straight answer from my bank.
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Old 06-23-2015, 09:34 AM
 
Location: Mount Laurel
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What's the rate on the HELOC? Bank sees it as you having $86K balance on a $102K property. You need to reduce the LTV ratio.
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Old 06-23-2015, 09:39 AM
 
Location: Phoenix AZ
5,920 posts, read 10,467,112 times
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Quote:
Originally Posted by Jackie2008 View Post
I have a question about refinancing a mortgage. A house had an appraisal of $102,000. There is currently a mortgage with $52,000 left on it at 6% and a home equity line of credit of $34,000 on it. Trying to get at least the primary mortgage refinanced at 4%. It got rejected because according to the bank, too much money is owed and was told it was at least $11,000 out in getting financed. Does this make sense? Having a hard time getting a straight answer from my bank.

Well, sounds like you applied for a mortgage that requires 25% equity, whether you realized it at the time or not. The credit union I use gives super-awesome rates & super-low fees for loans with 25% down/equity - switching to a loan that requires less than 20% down (even 19% doesn't count) means the rates and fees go up dramatically (we're talking thousands more in costs, not hundreds) I'd be very surprised if you *can't* refi the loan (somewhere), but you might not save much at all over your current situation after the increased fees & expenses are factored in.

You could try another lender, or scrape together a little more dough..
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Old 06-23-2015, 09:42 AM
Status: "Here We Go Again" (set 17 days ago)
 
Location: Up Yonder
259 posts, read 446,006 times
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Quote:
Originally Posted by sj08054 View Post
What's the rate on the HELOC? Bank sees it as you having $86K balance on a $102K property. You need to reduce the LTV ratio.

The rate on the HELOC is 2.75%
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Old 06-23-2015, 09:46 AM
Status: "Here We Go Again" (set 17 days ago)
 
Location: Up Yonder
259 posts, read 446,006 times
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I originally went in for just the 4% refi. The mortgage specialist said I could combine both the mortgage and the HELOC and a credit card that I have but that got foiled by the lower appraisal (this house was appraised at $125,000 in 2006 when I took out the mortgage). So, as of last Friday, I was going to be able to refinance the mortgage and pay off the cc but I got rejected as of yesterday.
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Old 06-23-2015, 09:47 AM
 
Location: Mount Laurel
4,146 posts, read 8,407,404 times
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Quote:
Originally Posted by Jackie2008 View Post
The rate on the HELOC is 2.75%

What are the rest of the terms.

May be worth looking into tapping the HELOC. Just have to tread carefully.. you need to understand the HELOC terms. You don't have a balance on the HELOC do you?
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Old 06-23-2015, 09:52 AM
Status: "Here We Go Again" (set 17 days ago)
 
Location: Up Yonder
259 posts, read 446,006 times
Reputation: 227
Quote:
Originally Posted by sj08054 View Post
What are the rest of the terms.

May be worth looking into tapping the HELOC. Just have to tread carefully.. you need to understand the HELOC terms. You don't have a balance on the HELOC do you?

Yes, the balance is $34,000
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Old 06-23-2015, 10:01 AM
 
Location: Boise, ID
8,013 posts, read 22,556,078 times
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Yeah, $86k owed and an appraisal of $102k means you have an 84% LTV. Most lenders do require 75% or lower on a refi. So you'd have to bring the cost of the refi PLUS enough extra to get the balance down to 75% in order to close the refi. That is most likely where the $11k is coming from.

I looked at doing a refi a few years back, but values were down so much that I was going to have to bring $15k to the table to close it. Ended up doing the refi last year once values had recovered a bit.
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Old 06-23-2015, 10:03 AM
 
Location: Mount Laurel
4,146 posts, read 8,407,404 times
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Quote:
Originally Posted by Jackie2008 View Post
Yes, the balance is $34,000
If that is the case, forget the refi. Focus on paying your debt down.. CC first.
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Old 06-23-2015, 10:40 AM
 
3,323 posts, read 7,269,271 times
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Lenders in no way require a 75% LTV cap as a rule. Depending on your credit score, you can tie them together into one loan with a small Conventional Mortgage insurance component, and be at 85%. **This option is not available if you are in Texas.

OR you could perhaps HARP the first, perhaps even with NO appraisal, and re-subordinate the 2nd.

It could be that the 4% went up due to the low appraisal and subsequent smaller equity position, post-closing. But you should understand what is going on here, and that is your lender's failure.

The problem is that your lender has not been able to explain anything to you.
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