Option for an 80/ 20 mortgage

torias_22 · Joined: 17 Oct 2007 Posts: 1 1.37 Dollars($)

When we bought our house my husband did not have good credit- we were advised to get an 80/20 and take them out in my name but still list his income. Well as you know we are paying double the interest and the 20 is at al ittle higher rate 7.2 and the 80 is at 6.8. I want to combine these ? His credit is very good now and mine has always been good - What are my options?

Guest 0.10 Dollars($)

If you wish to combine the two loans, then it's better to do a cash out refinance of the first mortgage. In this way, you could pay the existing first loan and get a new one. Also, there will be some extra cash offered to you depending upon your home equity and with this cash, you can pay at least a part of the second mortgage.

adonis · Posted: Thu Oct 18, 2007 6:29 am Post subject:

But Ryan, Toria can do a cash-out refinance with a loan amount combining both the 80% and 20% loans, isn't it?

Torias, a your credit record is good, it may not be difficult to get a combined loan.

evolovik26 · Posted: Thu Oct 18, 2007 6:39 am Post subject:

If there is enough equity in the home and you have exelent credit as you have stated you should definately take a look at your options. If the new combined loan going to be over 80% of the home value there is a possibility that you will have mortgage insurance but chances are it will not offset the value of the refinance. Another thing to concider is your income (if you have enough to go full documentation you will get the best deal) If you have only used the 2nd mortgage for the pruchase of the home its not a cashout refinance.
Right now with exelent credit, 2yr work history with enough income to qualify and 80% or less loan to home value ratio you can expect an interest rate in low sixes for a 30yr fixed. You might even be able to do a no closing costs (or limited closing costs) refi at high sixes to low sevens, although if you not planning on selling or refinancing this home for 10yrs or more this might not be a good solution for you.
In the end there is alot of information missing in your question and it is hard to determine eligibility for one loan or another on such limited information.

livinginnky · Posted: Fri Oct 19, 2007 11:24 am Post subject:

I agree with Eugene.

Your current rates are not bad. Are either of them adjustable?

Like stated above you will probably have to pay mortgage insurance. So even if you get a better rate on 1 loan it may not save you money. The only way to find out is to apply and see what new loan options you have.

lisascherzer · Joined: 04 Jan 2008 Posts: 749 0.10 Dollars($)

If you do have an adjustable rate on either mortgage I would suggest refinancing right away. If the second is a fixed rate then it sounds like you would be better off keeping that one and refinancing the first at a lower rate (somewhere in the 5's). The reason this is better is that if you get one loan to pay off both, then you will have PMI insurance thus causing your payments to increase. It works out better to just do the first.

All times are GMT - 7 Hours

Page 1 of 1