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Jessica
Community Mentor
Joined: 08 Jun 2004
Posts: 814
Location: OHIO
195.97 Dollars($)
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Post subject: RE: second mortgage needed to buy less exepnsive home |
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Hi Rob,
Welcome to our community forums.
In order to determine the monthly payments on your second mortgage, I need to know what loan amount you are getting from the lender, the rate of interest and whether it's a home equity loan or Heloc etc. First of all, are you buying a house just for the sake of it or is it all about getting a less expensive home?
Please don't take up a second mortgage just because you want to lower payments. Payments can be lowered even if you can refinance and that's a better option. But I don't know how much lower a rate you can get considering the fact that you already have an interest rate of 5.75%.
I think it's better if you talk to a few lenders and find out what rate they can offer you on the refinance loan. A second mortgage is again another loan on the home and it is risky because you will be managing 2 loans and if in case you can't pay, you're in trouble with 2 loans. Still, if you think your current financial situation is good enough to help you afford the 2 loans, then you may very well go for it.
However, choose a good tenant who can look after the property well without damaging it. And, make the payments on your own from the rental payments; don't leave it for the realtor to collect the rent and pay the mortgage. You may land up in trouble later. I find so many people sharing their experiences on how they've suffered at the hands of tenant and realtors.
Regards,
Jessica
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http://jessica.mortgagefit.com/ |
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Rob
Guest
0.10 Dollars($)
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Post subject: Still tired in Tampa |
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Jessica,
Thanks for your reponse. My purchase of a new home would be for several different reasons- investment purposes, to be closer to a different job, as well as a lower mortgage payment. My thoughts on achieving the lower mortgage payment are this: buy a home for say $150, base the home equity loan amount on the number necessary to successfully get my mortgage payment on the new place down to less than my current payment. I'm hoping to bring in enough on rent to cover my current mortgage and part of the 2nd mortgage. I guess I'm just trying to figure if that is achievable based on rough figures (estimates) right now.
Another question is- should I take a larger home equity loan so that I have some reserves in the bank to cover a missed tennants mortgage payment? Lastly-does it make sense to take enough to cover the expense of a new car as well? Thanks for any advice you can give. I know there's a lot of hypothetical info here. I'm just trying to think things through and figure if it's even possible to pull this off based on the high amount of equity that I have. I hope that by not selling my current place that in a couple of years the market will have rebounded and I'll be glad I kept it and rented it vs. selling.
-Thanks so much,
Rob |
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Samantha
Community Mentor
Joined: 16 Sep 2005
Posts: 1602
Location: MASSACHUSETTS
149.70 Dollars($)
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Post subject: RE: equity loan |
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Hi Rob,
Welcome back.
I don't know how a second mortgage can give you lower payment because usually these loans being subordinate to that of the first, make you pay more in interest. And, if you are taking a larger home equity loan, what loan amount are you expecting? because if you take too large an amount, you may later have problems paying it and may even lose the home.
What I'll suggest is, if you are that keen on buying a second home, go for a loan on the new home itself.
Please let me know if there's anything more you'd like to discuss.
Hope this helps...
God bless you.
Samantha
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Know how to compare lenders with mortgage booklet |
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charlesarmbruster
Community Experts
Joined: 12 Oct 2006
Posts: 169
Location: Mesa, AZ
43.75 Dollars($)
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Post subject: |
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OK -- you can refinance your current home from $80k to $190k, taking $100k cashout to give you down-payment funds for your $150k new home purchase and some extra for mortgage payment cushion and car purchase....you need to decide if your want to pay for a car inside your mortgage, since when you replace it...you'll still be paying for it inside that mortgage -- this is really a judgement call, since you may be selling the rental home for a good profit in the future.
Your new $190k loan (<80%LTV) will price out at about $1300/month. Your new $100k purchase loan will price out at about $750/month. To qualify with FULL DOC income/employment, you'll need to afford $2050 plus your normal expenses less 75% rental income each month (assuming you own no other properties)....otherwise, take less cash-out.
If you are intent on buying another property, you should make application to determine your options -- a good loan officer and realtor will guide you to a good deal with the right financing. GOOD LUCK!!
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Chuck Armbruster
Phoenix, AZ |
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albe
Guest
0.10 Dollars($)
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Post subject: How to get out of a mortgage after a divorce? |
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| I have been divorced for a year or more and am worried about my ex not meeting payments on the house. Even though she got to keep the house and assume payments when we were divorced my name is still on the mortgage as co-borrower. She doesn't currently have a full time job, but makes payments from alimony and child support. Is there any way I can get my name off the mortgage? |
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larry
Joined: 27 Jun 2007
Posts: 3328
474.49 Dollars($)
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Post subject: |
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Hi albe,
Welcome to the forum.
To remove you from the mortgage your ex will have to refinance the mortgage on her name. So can she refinance the mortgage? Are you still on the deed?
Please inform these queries so that I can help you better.
To know more about refinance check out http://www.mortgagefit.com/refinance/faqs.html
Best of luck,
Larry |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7405
Location: bloomfield, ct
62.63 Dollars($)
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Post subject: |
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albe, it appears from your post that your former wife would be unable to refinance at this time, based on her lack of employment. of course, if the alimony and child support payments are sufficient for her to qualify, that is another story.
frankly, it's impossible for us to make any determination of her ability to refinance based on sketchy information. in other words, she may or may not be qualified to refinance.
the topic of novation has been brought up in many of our forums here. this is a process in which the lender (holder of the mortgage), your former wife and you all agree that you would be removed from responsibility for the payments. clearly, this is a topic you and she ought to discuss, and if you can agree on it, then take your case to the lender.
typically, if your divorce decree stipulates that you are to be excused from making payments on the mortgage, the lender would honor that. to remove your name from a document you signed is, of course, impossible. the best methods to relieve yourself of the obligation are for her to refinance or for the two of you to seek and receive approval for novation.
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George M. Akerley
Loan Consultant
860-221-5044 |
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StacyB
Guest
0.10 Dollars($)
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Post subject: second mortgage |
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| My husband and I want to take out a second mortgage. If we owe $129,000 and our house is appraised at $170,000, does that mean we can take out up to $40,000? We want to consolidate debt and also a car loan. Is this correct and the best thing to do? |
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Caron
Moderator
Joined: 19 Jul 2005
Posts: 1562
Location: florida
266.58 Dollars($)
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Post subject: RE: second mortgage/equity loan amount |
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Hi StacyB,
Welcome to our forums.
The equity in your home is calculated as = Current appraised value – amount you owe
That is, equity = $170,000 - $129,000 = $41,000
So, you can borrow maximum up to $41000. But no lender will be willing to lend you 100% of the equity. Mostly lenders prefer to keep the combined loan to value ratio equal to or less than 80% of the current appraised value, which comes to $32,800 in your case. But if you have great credit and good income, you may get somewhere around 85% also.
Are you looking for home equity loan? If yes, take a look at the home equity loan page and find out what it's all about?
Good luck
_________________
Mortgage Shopping made easy with booklet |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7405
Location: bloomfield, ct
62.63 Dollars($)
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Post subject: |
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stacy, check around with credit unions and local community-type banks in your area. you may find that they'd be willing to go up to 100% of the property value; and at decent rates, also.
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George M. Akerley
Loan Consultant
860-221-5044 |
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netta
Guest
0.10 Dollars($)
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Post subject: loan |
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how long do you have to be in your house before taking out a second
mortgage |
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gmakerley
Community Mentor
Joined: 09 Nov 2007
Posts: 7405
Location: bloomfield, ct
62.63 Dollars($)
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Post subject: |
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netta, you will find that second mortgages are almost extinct with major lending companies.
you'll also find many community-based institutions will still go out on a limb and make a second mortgage, and many of these will have no restriction on length of time of ownership.
your best bet is to stay local and to shop around with credit unions or small, community banks.
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George M. Akerley
Loan Consultant
860-221-5044 |
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lisascherzer
Joined: 04 Jan 2008
Posts: 755
1.07 Dollars($)
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Post subject: |
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Netta,
There is no time period although some lenders do require 12 months in the home to use the appraised value over the purchase price.
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Lisa Scherzer
Allpointe Mortgage
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Tulsaboyw
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0.10 Dollars($)
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Post subject: 2nd mortgage |
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I agree with the negatives on secondary loans/etc.
Except that, if you have known possibility of being able to pay off a chunk of the property ... like in my case, 1/3 of my moms estate, you could get the main mortgage like I did at 5%, and get the 2nd/3rd in small chunks.
I had a $75k, $20k, $10k.
I paid off teh $10k rather quickly on my own. The others continued for a bit. The $20k was paid with my share of moms estate.
The remaining part of my share was not going to be used for mortgage etc but for other... Refinance in this case was not worth it because the rate & payments would have not been better in this case.
If its not worht having the extra mortgages per a quick payoff, dont do it.
2nd mortgags can be expensive. |
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Ttown
Guest
0.10 Dollars($)
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Post subject: 2nd mortgages exinct (now they are). |
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2nd mortgages are now treated more like 'equity line' or equity loans.
Still 2nd mortgage in some ways but as expensive.
MY lline was good till It got close to max..
Once it was paid off, I found it was better to be without lineofcredit. |
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