I had a recent conversation with one of my clients, Mr. Jackson, who has an intelligent home finance Virginia Beach, VA. He asked me a question Interestingly, I wanted to share with you because it seems a common problem for homeowners in many states.
What is the best way refinance my first mortgage and second? Mr. Jackson has developed, "I have a mortgage of 6% first with a balance of $ 255,000, and a second mortgage at 14% with a balance of $ 52.500. We have a mortgage 125% second pay some credit cards. If Can I add loans and we have exceeded our home equity that the property was priced at $ 280,000. We are happy with the mortgage rates senior, but we wanted to lower the rate of the second mortgage. Some years have passed since he took the second loan in 2002, and the value of our house has increased to approximately $ 325,000. He continues: "Should I refinance the second for yourself and try to get a lower rate, or should refinance first and second set for a mortgage payment? "
Wow, what a good question. I let my client to consolidate their credit card debt with a fixed rate loan. He was very happy with your monthly savings for 125% loan it exceeded the value of the property, which does not consider the refinancing of loans to housing costs have increased significantly in a nearby chapel. Now that your home has appreciated in value, it seems that your credit associated with the value was less than 100%. Your options for refinancing much higher with a greater appreciation of housing equity.
I asked Mr. Jackson, a couple of questions for me to help you find the best solution. How do you rate your credit? Do you know your credit score? Is there a prepayment penalty your second mortgage?
Is this your first mortgage has a fixed interest rate?
Jackson responded quickly: 689 score credit, no prepayment penalty after 3 years and their first mortgage is 6% at a fixed rate 30.
Combining the first and second mortgage on a loan can be a challenge, but sometimes it makes sense financially and practicality. For Jackson, the best option is to leave his first mortgage alone, and simply for the refinancing of mortgages at 95 125% 100% second mortgage to reduce monthly payments. So, Mr. Jackson has been approved for a mortgage to fixed rate second. Questions have been raised on a line of credit, but I remind him that the adjustable rate that increased rapidly in recent years. Since I am indebted for the long-term debt, a loan rate fixed interest Simple is the only way to go. I was excited by Mr. Jackson, because we were able to remove the Council approved a loan without penalty prepayment and we were able to reduce the costs of closure because your credit score.
Under the equity program in homes, mortgage costs May 2 to a few thousand dollars in closing costs. Most closing costs are deductible tax and get the lowest possible useful in the long term. For example, a period of 15 years, which would recover the cost of the mortgage second row, in a few years, so if you can get 1% or more higher paying some closing costs, it would be better than a loan at home with no points. The reality is that most loans have second mortgages no sense require more than 700 points of credit and loans combined with the value most likely need to be below 90%.
If you are able to obtain a second mortgage no prepayment penalty, then get your loan offer, because if the value of your home continues to increase, then in a year or two, you may find yourself ready to refinance, because it is back on gold at 80% combined loan to value. If mortgage rates fall first pass, then you can be in an ideal position to finally combine the two loans. If the rate first mortgage fell to 6% zone, and still intend to live in your home for many years after moving to refinance. It all comes down to what the rate is, the time comes.
Lynda Nelms writes a popular column, called “Ask Lynda” where she offers helpful home financing tips to consumers from an experienced loan officer’s perspective. She wrote a few popular articles in 2004 & 2005 for Mortgage Loan Outlet [http://www.MortgageLoanOutlet.com] and she continues to pass her advice to other finance related sources.
Currently, Lynda originates loans for BD Nationwide Mortgage, who is located in San Diego, California. You can read more of her “Ask Lynda?” articles at BD Nationwide Mortgage and get more information about home equity and second mortgage loans. For a complete look at 2nd mortgages please go to the home equity loan resources online.
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11) Second Mortgage Crisis 60 Minutes (Business)