Cash out refi with 90-95% LTV (loan, interest rate, heloc, credit score)
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Fannie and Freddie's rules don't allow it, and w/ the majority of mortgages insured by them, you won't find it. There might be credit unions that would do this. You could always try for a different appraisal, and hope to get closer to the 80% LTV.
However, your best bet is just doing the cash-out to 80%. You're still not going to get the best rate here, you'd probably be 4.75% on a 30 year.
Fannie and Freddie's rules don't allow it, and w/ the majority of mortgages insured by them, you won't find it. There might be credit unions that would do this. You could always try for a different appraisal, and hope to get closer to the 80% LTV.
However, your best bet is just doing the cash-out to 80%. You're still not going to get the best rate here, you'd probably be 4.75% on a 30 year.
RJA29 is correct, majority of lenders are not going to deviate from Fannie / Freddie standards. Doing so would make the loan essentially unsellable in the secondary market and with likelihood of interest rates heading up almost no institutions are going to want to have loans in "portfolio".
Where I might differ with RJA29 is on suggestion of credit unions -- they too have very little reason to want a portfolio loan with low equity.
In fact, the one thing you might try, especially given the outstanding credit score, is a smaller / mid-sized bank. Especially if the bank is trying to expand its "wealth management / business banking / private client" type offerings AND you have a business or are part of a desirable profession (things like physician or homebuilder are hot right now...) you MIGHT be able to get them interesting in high LTV lending, but even that is long shot... The upside for the lender is that if you do have the ability to get the bank into some more profitable areas a smaller bank will put some high LTV loans into their portfolio as part of the marketing / good will efforts.
Try an equity loan or HELOC instead, the rules are usually less strict.
The issue is that as interest rates move upward there is greater risk of devaluation. What starts out as a 90% LTV loan quickly sees the borrower owing more than the market value of the home. Lenders with a memory that goes back eight years know that those conditions exacerbated the prior crisis and they do not want to get sucked into the downward spiral again...
The issue is that as interest rates move upward there is greater risk of devaluation. What starts out as a 90% LTV loan quickly sees the borrower owing more than the market value of the home. Lenders with a memory that goes back eight years know that those conditions exacerbated the prior crisis and they do not want to get sucked into the downward spiral again...
And if this turns out to be a problem, a cash-out refi would have the same problem. In fact, it is probably even worse for a cash-out first lien mortgage than for a second mortgage...with a second mortgage if the value of the property drops it may be possible to negotiate with the lender to borrow an unsecured loan for the difference. I've never heard of a 1-st lienholder doing that except when the government steps in (HARP...)
And if this turns out to be a problem, a cash-out refi would have the same problem. In fact, it is probably even worse for a cash-out first lien mortgage than for a second mortgage...with a second mortgage if the value of the property drops it may be possible to negotiate with the lender to borrow an unsecured loan for the difference. I've never heard of a 1-st lienholder doing that except when the government steps in (HARP...)
Bluntly, a lien in first position is more likely to be recovered (including through foreclosure) than than one in second position when a borrower defaults. Lenders "flexibility" is a function of what minimizes their potential loss... What Happens to Liens and Second Mortgages in Foreclosure? | Nolo.com
How long are you going to keep the home? You don't say how long you will be there or the current term of the first trust.....and why it would be a benefit from refinancing it? If that first needs to go, an 80% refi 1st and a 10% (cash out) heloc with someone that has the ability to lend outside of Fannie guidelines. Chances are you would need to go with a long term ARM on the first, such as a 7/1 @ 3.25%. most helocs are variables, as well.
Are there any lenders in MA who will give me a 30 or 40 yr fixed refi?
Appraisal of $295,000
Principal of $205,000
Credit score of 800
Goal: Refi with about $80,000 cash out for home improvements, which would be about 90%LTV.
Is this possible and who can I use to get a low int rate?
Thank you
Line of Credit seems to be your answer here unless the home is in disrepair.
If you are looking for one loan instead of a second, the FNMA Homestyle Renovation loan is an option. Valuation based on post-improvement value. This is your only one-loan 90% LTV option unless you are VA eligible. (Yes, Freddie has a reno loan as well, very similar to Homestyle.)
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Mostly agree...
