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Old 06-28-2008, 05:16 PM
 
Location: somewhere in ms
16 posts, read 53,377 times
Reputation: 13

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hello. trying to refinance our home. here's some background: i have a mortgage(had to get it quickly, the investor that i bought the home from, did a wrap around mortgage, and had to get out of it. my payment then was about 615-i had to pay taxes and insurance separately), when i got a new mortgage in my own name, the interest rate that i could get was 8.25 %, my payment is now 782. i couldn't refinance until three years without penalty. my home was appraised at 129,000 three years ago, my balance is about 103000. i tried to refinance it this past april. the guy wanted me to try and get 135000 and pay off some debt. i just wanted to refinance the mortgage amount ONLY. i didn't want to get a fha loan that would have the mpi(whatever it's called) insurance tacked onto it and use up all the equity in my house for stupid debt that i created(also didn't want to be paying on it for 30 years!-with a 900.00 a month payment!)he said that i HAD to do a cash out because my debt to income ratio was high without paying off some of the debts. i have put my debts, and my income into a debt to income ratio calculator based on the debt payments amounts on my credit report and on one it is 34%, the other it's like 29%, and 27%. i have since paid off 2 of the debts.. should i retry and refinance now?, or keep paying off the debts and try again in 6 months? was that guy pulling my chain? another thing was that i didn't know where $8000 of that refinance money was going...so i told him the deal was off....our credit rating is about 680. we also have a home in another state that is rented out to family(they have been renting and paying on time for 3 years-no problem there-that house also has about 10,000 equity built up in it..)..thanks!!

Last edited by shelby78; 06-28-2008 at 06:23 PM..
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Old 06-28-2008, 05:54 PM
 
Location: Charlotte, North Carolina
5,137 posts, read 16,540,812 times
Reputation: 1009
I dont understand your logic.

You would rather pay high interest credit cards which has no tax deduction than rolled it into 1 mortgage to start all over.

Just because you get a 30yr mortgage DOES NOT MEAN you can't pay it off sooner.

Here's an idea

Current Scenario
Mortgage payment 782
Credit card debts 500<<<<maybe your debt is much higher?
Total 1282
Payoff....maybe never with those credit card interest rates.

New Scenario @ 135k
Mortgage Payment 900
Credit card debt 0
Total monthly 900
Savings per month 382
Payoff ..... in at least 30yrs

What to do with that extra 382? PUT IT ON YOUR 30YR MORTGAGE!

Putting 382 towards your mortgage will payoff your mortgage in 13.75 yrs.

If your loan officer didn't explain it this way, then I would find someone else who can help you.


Quote:
Originally Posted by shelby78 View Post
hello. trying to refinance our home. here's some background: i have a mortgage(had to get it quickly, the investor that i bought the home from, did a wrap around mortgage, and had to get out of it. my payment then was about 615-i had to pay taxes and insurance separately), when i got a new mortgage in my own name, the interest rate that i could get was 8.25 %, my payment is now 782. i couldn't refinance until three years without penalty(yea, really stupid of me!-hard lesson learned). my home was appraised at 129,000 three years ago, my balance is about 103000. i tried to refinance it this past april. the guy wanted me to try and get 135000 and pay off some debt. i just wanted to refinance the mortgage amount ONLY. i didn't want to get a fha loan that would have the mpi(whatever it's called) insurance tacked onto it and use up all the equity in my house for stupid debt that i created(also didn't want to be paying on it for 30 years!-with a 900.00 a month payment!)he said that i HAD to do a cash out because my debt to income ratio was high without paying off some of the debts. i have put my debts, and my income into a debt to income ratio calculator based on the debt payments amounts on my credit report and on one it is 34%, the other it's like 29%, and 27%. i have since paid off 2 of the debts.. should i retry and refinance now?, or keep paying off the debts and try again in 6 months? was that guy pulling my chain? another thing was that i didn't know where $8000 of that refinance money was going...so i told him the deal was off....our credit rating is about 680. we also have a home in another state that is rented out to family(they have been renting and paying on time for 3 years-no problem there-that house also has about 10,000 equity built up in it..)..thanks!!
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Old 06-28-2008, 06:21 PM
 
Location: somewhere in ms
16 posts, read 53,377 times
Reputation: 13
the reason why i would not want to dump all my stupid debt into a 30 year mortgage and pay $900.00 a month for 30 years, is because i can pay off the debt within a year. compare 1 year or 30... and still have my 24000 in equity. im looking for long term solutions, not just short term. i also don't want to be in this house for 30 years and would like to someday roll that equity into a 1031 exchange. i appreciate your response .
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Old 06-28-2008, 06:41 PM
 
9,618 posts, read 27,232,602 times
Reputation: 5382
What your house was worth three years ago and what it is today could be less or more, depending on where you are....And you paid off two of the debts?
I'd try again now, maybe with a different lender, and since you paid off two of the debts, you wouldn't need to borrow 135.
If you make extra payments to the principal every month,as renriq02 said, you can pay it all off much sooner..Credit card debt is horrible, I've been there. Get the home equity loan, slice up the crdit card into 1000 pieces and mail it back to the lender.."Here's your credit card!"
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