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I would like to refinance and get cash out on my second home.
The home is under my wife and I. But, my parents live there and pay all bills, including mortgage. The house is worth about 650,000 and the existing loan is 225,000 at 6.125 fixed. Mortgage payment around 2,000.
I have a home that I live in, in another city (about 30 miles away). This home is worth around 1,300,000, with a loan in the amount of 825,000. I have a interest only loan. Mortgage payment around 4,100.
My income was 60,000 in 09, 120,000 in 08, and 100,000 in 07. My credit score is around 700.
I would like to get around 100,000 to 200,000 if I was able to refinance the home that my parents live in. What are my options? Is there any loans that I might qualify for? Any help would be appreciated.
Something is not clear to me and I suspect any lender would be even more leary of the situation:
While it is nice to help out your parents, why are THEY not on the title for the $650K home. If they are financially responsible for it why would YOU like to extract equity from it? Who does this help? Will all of you crash and burn?
Other questions you should be prepared for:
What are the terms on the i-o loan for $825k -- jumbo category in any geography.
Why is you income HALF of what it was?
How the heck are you gonna swing another $200K in debt?
I would like to refinance and get cash out on my second home.
The home is under my wife and I. But, my parents live there and pay all bills, including mortgage. The house is worth about 650,000 and the existing loan is 225,000 at 6.125 fixed. Mortgage payment around 2,000.
I have a home that I live in, in another city (about 30 miles away). This home is worth around 1,300,000, with a loan in the amount of 825,000. I have a interest only loan. Mortgage payment around 4,100.
My income was 60,000 in 09, 120,000 in 08, and 100,000 in 07. My credit score is around 700.
I would like to get around 100,000 to 200,000 if I was able to refinance the home that my parents live in. What are my options? Is there any loans that I might qualify for? Any help would be appreciated.
Thanks
I have an idea, kick your parents out of the house, sell it and make the 425k in equity. Take $200k of that for yourself and then use the other 225k to put down on something reasonable for your parents to live in.
My parents credit wasn't good in 2000, when the property was purchased. That is why it is under me. As for why my income is cut in half. I am self employeed and to cut cost, I gave myself a cut in salary.
I am planning on using the cash out to reinvest into my business and to pay off some debt. My parents will continue to pay the same amount and I will cover the rest of the mortgage, if I am able to somehow refinance. I can afford to pay the mortgage monthly, I just need a chuck of it soon for my business.
As for selling the property. I would still need to get a loan to buy something else, if I used the 200k. I'm not sure if it would make a difference in trying to buy a 400k home and putting 225k down. Would I better qualify for a loan then?
I feel for ya' bro, but this is going to be real hard to do in this environment. Lots of problems. Lenders have really and truly tightened the standards on home equity loans / helocs. A lot. Anything that not owner occupied sets off alarm bells. Anything over the conforming line is basically un-borrowable. Anything that leaves less than 70% equity in the property is no going to fly. Anything that pushes the borrow ratios into the red is not going to happen.
Throw all the fun on top of the "mean new appraisers big book of pain" filled with comps that sold at auction prices and pretty soon the $200K you want to borrow looks like a fairy tale...
Not saying you ain't going to find SOME lender that MIGHT do a loan for you, but you might get scik to your stomach at the fees and interest rate.
If there are laws in CA that might make it easier, you also better be very sure that you REALLY can handle this new debt -- business keeps slipping and you might have to sell BOTH your home and the one that mom & dad are living in. That really would be ultimate end game for all...
I really doubt that you could take $200K off the table if you sold the less expensive house. The transaction costs are going to nibble away at that, as well reality of the market. Plus m & d would be very likely to be accustomed to "shopping" in a very different price range, and there even be tax implications. Only thing good would be the hope that they now have better credit and could this "on their own" with out dragging you into possible mess.
I appreciate your knowledge and candor. I tried with BofA to refinance and they said my DTI ratio was too high last year. I was just trying to find out if it was possible and if anyone could assist me. Thanks.
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