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10-27-2008, 07:22 PM
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2 posts, read 9,098 times
Reputation: 10
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All,
Any advice is welcome, so here my deal. I am looking to take out $30K for schooling (MBA), pay off my car and fixing up the place. My original loan was $184K and now I owe $172K. I went to Chase to tried to get a Home Equity Loan and according to Chase my property is only worth 235K (originally purchase it 230K in 04, whatever...) Needless to say I got rejected on my loan. Tried Country Wide and same thing, REJECTED..... The only option I have with GMAC is to refinance for 7 something percent with a cash out option. Sorry, that's not an option considering I got 5.65% fixed . They all tell me simply there not enough equity at my place.
My credit rating is over 700, I also make over 90K a year and my wife also makes a good living as well. What are my options, should I call Leading Tree of something. I don't mind paying PMI if I have to take out a second loan. What are my options, any suggestion you can offer me would be great. Thanks
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10-27-2008, 07:36 PM
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Location: Plano, Texas
1,675 posts, read 6,853,607 times
Reputation: 697
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I would suggest that you contact a mortgage broker who can shop you with many lenders; however, if you refinance you will lose a very good rate. have you attempted a 2nd lien cashout? 2nd liens to carry higher rates then a first lien but the interest is still tax deductible.
When contacting a direct lender, your value will be determined by the lender and will be ulta conservative. Where are you located?
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10-27-2008, 08:53 PM
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Location: MID ATLANTIC
8,474 posts, read 21,985,451 times
Reputation: 10063
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Did Chase or CW send out an appraiser? Or did they do what is called a desktop? Even so, let's assume they are right, the value is 235K. FHA will allow you to get a cash out loan to 95%....but you better move fast. It's rumored all over the place FHA is going to cut that back to 85%. Many think if you have your case number (assigned when appraisal is ordered) the date the case number was issued will be the decision factor if it's 95% or 85%. There is mortgage insurance, but the rate isn't much more (not more than 1%, if that) than what you are paying now (also depends on day of the week, rates are volatile).
If this is something you are serious about, don't mess around. The chatter about the guideline change is loud, so I am willing to bet there is some truth to it. Without knowing your location, that's about the best I can come up with for you.
It's probably a good thing you didn't get the Home Equity loans. They are ugly, can go to the maximum usary in your state (here in VA it's 23%) and the lender always has control when you can and can't access it.
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10-27-2008, 09:25 PM
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Location: Charlotte
52 posts, read 127,372 times
Reputation: 23
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FHA sounds like the best option in your situation.
Smart Money, I haven't heard any rumors on the FHA cashout ltv. I wouldn't doubt it, because it really is the only show in town, but where are you hearing that from?
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10-28-2008, 12:47 AM
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2 posts, read 9,098 times
Reputation: 10
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VictorBurek, SmartMoney and LJ Charlotte
Thanks for your input, I am located in NJ, and SmartMoney your right they called directly from the desk and when they appraise my property they based it out of some sort of sheet they were using. I guess I really do not have much of an option except FHA, as far as a mortgage broker would your say that LendingTree is consider as a mortgage broker? What are the downside to FHA? Thanks again, for all of your input.
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10-28-2008, 08:13 AM
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5,292 posts, read 13,589,169 times
Reputation: 4560
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Quote:
Originally Posted by chirashi
All,
Any advice is welcome, so here my deal. I am looking to take out $30K for schooling (MBA), pay off my car and fixing up the place. My original loan was $184K and now I owe $172K. I went to Chase to tried to get a Home Equity Loan and according to Chase my property is only worth 235K (originally purchase it 230K in 04, whatever...) Needless to say I got rejected on my loan. Tried Country Wide and same thing, REJECTED..... The only option I have with GMAC is to refinance for 7 something percent with a cash out option. Sorry, that's not an option considering I got 5.65% fixed . They all tell me simply there not enough equity at my place.
My credit rating is over 700, I also make over 90K a year and my wife also makes a good living as well. What are my options, should I call Leading Tree of something. I don't mind paying PMI if I have to take out a second loan. What are my options, any suggestion you can offer me would be great. Thanks
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Since you have a great fixed rate now without PMI, you should try to find another way (other than your house) to finance your schooling. Leave your car loan in place and forget about 'fixing the place up' unless it is mandatory (ie. roof, furnace...).
Can you pay for school as you go with your strong incomes? Or, get a student loan (I know that market has dried up like home equity loans). Or, get an unsecured line of credit and pay as you go. |
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10-28-2008, 09:37 AM
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Location: Tampa,FL
54 posts, read 256,817 times
Reputation: 18
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I would have to agree that FHA is the way to go with this one. If you call Bank of America, they may have a retail line of credit that might work. I dont care for them on the wholesale side, but if it will get you what you need then good luck to ya  |
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10-29-2008, 01:27 PM
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Location: Barrington
63,945 posts, read 44,363,317 times
Reputation: 20648
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Another alternative is to " do without".
You can get a student loan for your MBA. Does your employer offer tuition reimbursement?
You certainly have enough income to pay off your other debts, over time. . Home improvements can wait.
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10-29-2008, 03:12 PM
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Location: New York
2,251 posts, read 4,768,536 times
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chirashi
My wife and I are in a similar situation - her MBA+90hrs = $30k in debt, plus we are looking for an additional $30k for new driveway, new upstairs bathroom, payoff cc debt.
Last year we took out a $75k second mortgage with Wacovia at 6.75%, and remodeled our basement with new windows, bedroom and bathroom.
Five years ago refinanced our 1st mortgage - $144k into a 20yr @ 4.75% fixed with Wells Fargo. Been sending extra each month, now owe $90k.
The results of sending extra has driven up our credit score - now mid score 796.
My wife and I have been waiting for interest rates to drop. We were thinking about taking cash out and consolidating everything into a new loan.
After speaking to friends in the business, we would be crazy getting out of our 1st mortgage at such a low rate. Instead we need to look for a new 2nd mortgage.
Point - it really depends on what your interest rate is on your 1st mortgage if you should do a refi. On a refinance you will have closing costs, that will eat up your equity.
On just a second mortgage - the interest rate is slightly higher, but there is no closing costs.
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10-29-2008, 10:10 PM
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Location: MID ATLANTIC
8,474 posts, read 21,985,451 times
Reputation: 10063
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Quote:
Originally Posted by LJ Charlotte
FHA sounds like the best option in your situation.
Smart Money, I haven't heard any rumors on the FHA cashout ltv. I wouldn't doubt it, because it really is the only show in town, but where are you hearing that from?
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It's been reported to have been announced at a function where the President of the Mortgage Banker's Association spoke, and a couple of other message boards are buzzing that it's confirmed w/ their HOC. That is why I use the word "rumor" and haven't been emphatic when mentioning it. However, if someone is thinking about waiting until after the holidays (how many times have we hear that?) and it is true, it won't be there after the holidays. For those outside our industry, rumors tend to have more truth than fiction.....
I would love for it to be false. |
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