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For example, if I owe $200,000 and I have $50,000 equity, when I refinance can I use the $50,000 to pay down the amount owed. The new load would then be for $150,000 and I would have $0 equity.
No, your confusing yourself. Suppose your house is worth 250K and you have a loan for 200K.
If you take out a 2nd loan using the 50K equity and use the money to pay down the 200K loan then yes your old loan is now just 150K but since you have a new loan for 50K you still owe 200K total. No matter how you slice it the only way to reduce your debt is to pay it down without taking out new debt.
Unfortunately, I have about $40,000 in debt on credit cards...one card has a very high rate and others are pretty low. I have a house with almost zero equity...just bought it 15 months ago...with just 5% down. I'm probably even on it since home value drops haven't been huge in midwest.
Now, I have about $20,000 bonus coming in 1 month. Should I dump the $20K on the credit cards? OR...would there be a way to put the $20K towards house equity...then refinance at a lower rate and then take out home equity to pay down high interest card and maybe others...my rate is 6.75, so I thought of even doing a 15 yr instead of my current 30 yr...? Any suggestions? By the way, I paid $159K for house with two mortgages...big one is $119K so I could get it down to under $100K and then hopefully REFI on it...
Thanks for any help! Happy New Year!!
My aunt recently refinanced a house in San Diego California. The refinanced amount was 475.000.00 up from the original purchased price of 415.000.00.
The equity buit was 60.000.00. Will she have to pay taxes on those 60.000.00. if so what would be the tax percentage? She is singled.
She will not have to pay taxes after refinancing on that amount, HOWEVER, she WILL have to pay higher property taxes because it will be reassessed for the higher amount.
If she sells the house, she will have to pay any gain she has, which could be reduced if she saves receipts for things she improved on the house.
We've only been in it for 1 year so don't have much equity. We paid 189,000 for it - how much do we need?
You will need to have at least 5% FOR MOST LENDERS WHO ARE NOT ALREADY YOUR LENDER.
When a lender is already at risk, they will often start with zero equity. But by that I mean, they will take the price they could sell the property for now, and the new mortgage must be at most that much, in theory.
But given that they will lose by selling the home for less than the mortgage, they may agree to renew the mortgage without insisting you have any equity. It is a way to sell the house to you for a price above what it is currently worth.
Consider this:
1. I have $30k in credit card debt.
2. I have a 1st mortgage for $200k (4%) and a Home Equity line of $170k (at prime rate) with no additional credit available.
3. I am buying another house at the end of April.
Would I be better off refinancing my Home Equity and Credit Cards into a new Home Equity loan, or just stick with it as is?
I have heard that I may be able to get better rates on my loan for my new house if I refinance. Could this be true?
Thoughts? Opinions? Alternatives?
You don't mention how much equity you have left in the home, but lets assume you have some equity. You would not want to "max out" your equity. Save at least 5-10% since you are going to be buying another home soon. Now if you have equity left to refinance your equity loan & pay down some credit cards, by all means do so. To best improve your credit score, pay off what you can, but at least reduce each credit card so that you have some available credit if any are at or near their limits. These are important factors in credit scoring and will get you a better rate on your new home. Its best not to close the cards that you pay off. Having that available credit will help your score. Close the cards after you secure your new home loan. Good luck!
I just purchased the home I've been living in from my inlaws. It was sold to us for 109K, and we received a gift of equity for half the price, so after closing fees and such, our purchase price from the bank was only 56K. When the house was appraised, it was actually valued at 139K. So basically, after buying the house, we instantly have 83K worth of equity built in, depending on how the bank feels about the purchase price vs valued price from appraisal. We are wanting to use a chunk of the equity to pay off some credit card bills and do some renovations, somewhere in the neighborhood of 40K. My question is how complicated of a process would this be, is it even really possible, and how soon can I go about doing this?
First off, awesome deal!
Now to business: in this current market, there are no easy answers. What you "can" and "can't" do depend on so many factors, every loan scenario has to be taylor-fit to a specific borrower.
What's I'd recommend is that you meet with a broker you trust (Did you like the one that helped with the purchase? If so, go back to them!) and have them help you explore your options. A HELOC may be an answer, but those are usually on adjustable rated and the market is doing a lot of jumping around right now, and that may be like paying off a credit card with another credit card. A stand-alone second mortgage is another option, but the guidelines on those are tightening down. There are some lenders that let you refi with less than 6 months on title, but if there is a prepay penalty you will have to factor that cost into your cash out.
A broker or banker will help you look at ALL the options specific to you and either help you do some kind of new loan right now, or tell you when might be a stronger time to do that.
Good luck and congratulations on the new house! :)
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A plan for home owners - Detroit Free Press Detroit Free Press, United States - Feb 17, 2009
A plan for home owners I call it REIMR — government-sponsored Reduced-Equity Insurance for Mortgage Refinance. The $787-billion compromise stimulus bill signed by the president
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Obama to Unveil Plan to Help Troubled Homeowners Wall Street Journal - Feb 17, 2009
East Valley Tribune In addition, the administration is expected to detail a program that will allow homeowners who owe more than their homes are worth to refinance their Obama To Push Housing Ideas Today In Arizona Obama to detail foreclosure plan
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Eye on the market: Napa Valley real estate - Napa Valley Register Napa Valley Register, CA - Feb 17, 2009
Napa Valley RegisterEye on the market: Napa Valley real estate They can free up some value on their property to then get the refinance done. Also, I’m seeing a lot of activity where mom and dad have the equity in their
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Will Any Other Republicans Support the Stimulus Deal? - Washington Post Washington Post, United States - Feb 11, 2009
Will Any Other Republicans Support the Stimulus Deal? I took out 2 home equity loans one in 2003 and one in 2006 on top of the cash out refi in 2002 because a mortgage broker told me I could refinance out of
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Bailed-Out Banks Charge Highest Fees in FDIC Sales Bloomberg - Feb 17, 2009
The agency, which established the program to help banks refinance debt maturing this year, said it is considering extending the guarantee’s duration.
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