Question On Mortgage
We are doing a refi on a rental property---we orginallly wanted to do a heloc but the minimum fico was 650--we are at 636--lots of credit card debt and 1 late mortgage payment in past year (in Dec of last year--so it's almost been a year)--the moprtgage broker recommended we refi and cash out--he pulled credit and locked us in--I gave him all the documents and the appraiser is coming out tomorrow---can I relax a bit---this is so stressful--if appraisal goes ok are we good to go? Or can we still be denied ? The broker said he sees no problems but I can't help but worry--we NEED this money SO bad-----
btw the house is approx $260,000----we owe $148,000 and are looking for $25,000 cash out.
Also appraisal was $300--does that seem high to you?
Thanks much!
I would say you can relax a bit, from you have laid out above things look in order.
My only concern and I don't mean to sound rude, is that I hope you do the right thing with the money and are paying down debts.
You said lots of credit card debt AND you need the money so Bad - and now you are taking on more debt in the refi.
Use the money wisely my friend.
99% of money is going straight to the credit cards--the rest is going into savings as back up in case renters don't make rent--so no more late pays
thanks for your response
Make sure you dont close any of your credit card accounts. I would pay them down to 20% of the balances and stick the cash in a bank account INGDIRECT 2.10% on your money . I would also see if you can get a Payoption arm on the rental property . This program allows you to structure your loan payments according to your current income. This is good to avoid a 30 day late. Make sure your Debt ratio is 45%
Who does pay option ARM's on NOO? That is a great choice if you are getting things under control.
Q. Have you solved the problems that caused the CC worries condition? If not, get more help after you square this up.
* Do NOT close the credit accounts, but DO put those cards in the freezer(out of reach)!
* IF you can structure a plan to pay off the cards (even some of them) in a successive way, apparently that will improve your fico score better than quick pay off.
(ex. 500mo ea. for 6 mos.).
*I would save a larger amount in your rental backup account if cash is hard for you to get to. It would be terrible to loose your asset if a storm caused a problem or vacancy hit at the wrong time of year.
* Will your new payment be higher or lower than current payment?
Lastly, NO, 300. Appraisal looks to be standard for OO, and NOO looks to be 400+ standard in many areas from a recent sheet that I have.
~~ Good luck
Thank you for your responses....credit card debt is a scary thing--it's amazing how fast you can get sucked in....we have definately learned our lesson....good to know not to close the accounts as that is what we were going to do...will freeze or cut the cards up....also putting money away for back up in case renters are late and/or do not renew their lease....the broker said he is just waiting on the title, so I assuming everything is going ok so far....
You may want to ask if you have a "clear to close". This means all underwriting conditions are clear. Underwriters are trick, and if the processor didn't structure loan correctly, can deny the file for a number of reasons. I have always advised my clients, that there is no guarantee until the clear to close. If you tell them that everything is fine for the get-go, for some reason or another, they think its fine to go buy new cars, quit their job, drain their savings (expecitng the cash), etc...and believe me, I've had all of these things done before! The $300 appraisal is normal. Appraisals in my area (Washington, D.C.) run $325-$400 for standard appraisals, so it seems you got a pretty good deal. $300-$400 is normal.