Posted: Sun Mar 18, 2007 7:21 pm Post subject: what loan is best? just out of chapter 13
We just completed a chapter 13 bankruptcy. We have an ARM 30 year currently 10.75 interest- 1531 month. We have applied to refinance and are not sure which is a better option. With company A we can get a 40 yr loan with 2 yr fixed rate 8.99%- $1299 month, or fixed 9.9% 30 yrs 1429 month. Company A is local and we have met with the rep and he was very helpful. He has advised he will help us rebuild our credit - help get things off our credit report etc....We also applied online with company B and their offer seems better- 30 yr fixed 7.5% -$1283 month including PMI- fannie mae loan? .
All of the options catch us up on our property taxes - about $2500, and give us between $1000-$1500 cash out. The loan with company b was a rate term refinance. We are a little leary on doing it over the internet and like the person we met with in person, but is a 40 yr loan really bad in this circumstance? He says if we rebuild our credit make our payments etc we would refi in 2 yrs - but I am not sure on the ramifications of refi a 40 yr loan? ANy thoughts on this would be great! Thank you... the loan amount with each was 170000. Value of prop around $200000.
To me the second loan looks better. But since it is related to online application, you need to be more careful here.
You need to find out if the company is reliable and it will be better if you can visit their office once. This is just to make sure that it exists physically so that you don't have to bother about frauds of this kind.
You can check out for the reliability of the services offered by B from the Better Business Bureau website. By the way, what's the name of the company? Just asking, in case, I have heard anything of its services, I can inform it to you.
Guest, have you just got discharged from bankruptcy?
I think that's why the are on the 40 year loan is a bit higher. And, it is adjustable after 2 years, is it?
The other option that A is offering you looks better compared to the first one as it is a fixed rate loan. But then the interest is quite high. I guess this is just because you have just got out of bankruptcy.
30 yr fixed 7.5% -$1283 month is a comparatively better option because of it's low rate and monthly payment. Also, there is the PMI which is tax deductible for the current year.
company B is eloan, a is wealthspring. Yes just discharged 1 month ago, and want to get started on right track. If we went with the 40 yr loan, are those harder to refinance, back to a 30 say 2 yrs from now? Just seems we would owe a lot more on a 40 yr loan vs a 30 yr but this is all a bit confusing to me/ us... thanks your informative response...very much appreciated.
Posted: Mon Mar 19, 2007 12:57 am Post subject: RE: Refinance with a 40 year loan
40 year loan - hard to refinance! Well I haven't heard of such a thing. But it's a fact that there are not too many lenders offering such loans. So, may be not many may be willing to refinance. But this is just an assumption. You can't really find out until and unless you verify it with some lenders.
You have mentioned that you may refinance after 2 years when your fixed rate period is over. But that's a huge amount that you need to pay after 2 years and it depends on your finances as to whether you can really do it. and, does your loan have any prepayment penalty clause? if yes, then you may have to pay penalty if you prepay the loan. So, just ask your lender about such a provision.
Debtors that have determined the Bankruptcy status is appropriate, can refinance their mortgage after 36 months and are not required to pay any unsecured debts. 95% of the time this is the best option for the debtor! _________________
Do you really think so Michel? because i hear people saying that it's best to take a mortgage 2 years after discharge from bankruptcy. experts say that gives you the chance to build up good credit, clear up the mess in your credit report and then apply for loan, pay it off comfortably.
adonis
