Can we refinance?

mimax28 · Joined: 15 Oct 2009 Posts: 3 1.83 Dollars($)

My wife and I bought a house 16 months ago. I have horrible credit so I was not on the loan. Our interest rate is 6.6% on a $230 000 loan with an FHA zero down loan. Our payment is $1850 a month. This includes mortgage insuarance, taxes etc. We have automatic debit from our account on the mortgage and have never missed or been late with a payment. We have $10 000 in equity and we owe about $20 000 in other debt. We wanted to refinance and were wondering if we can refinance and also get the $20 000 we owe paid off or is this not possible at all. Our household income is about 120 000 a year. Thats just my wife's income. I am building a bussiness so the income is very inconsistant.
Our ideal situation would be to stay with trhe payment that we have when we refinance but include the debt we owe.

JKennedySLG · Posted: Thu Oct 15, 2009 8:21 am Post subject:

You cannot cash-out more equity than you have in the property. Right now, the maximum allowable on a cash-out refinance is limited to 85% of your homes current value. From what you have explained, it seems as if you may not have options at this point with limited equity. I hope this helps...

jveenstra · Posted: Thu Oct 15, 2009 10:48 am Post subject: FHA

As noted above, you will not be able to take cash out to pay the other debt based on the value of the property.

However, you may want to look into doing an FHA Streamline Refinance to lower you present rate of 6.6%. You do not need an appraisal, do not need to verify income nor assests.
You need to check into that right now because after November 18 the guidelines change. If no appraisal after that date, you can not cover closing costs in the new loan.
Rates are low. Do it now.

thewretched02 · Joined: 23 Jun 2009 Posts: 115 23.90 Dollars($)

are they break fees associated with the FHA refinance? Depending on the amount of penalties, it may only be marginally worthwhile, or even not worthwhile at all to refinance.

a lower interest rate may not help that much if you have break fees of thousands of dollars to get it.

mimax28 · Joined: 15 Oct 2009 Posts: 3 1.83 Dollars($)

We just got an offer of 5.6% interest rate on a refinance is that fare?

jveenstra · Posted: Tue Nov 03, 2009 3:53 pm Post subject: FHA

If your wife's credit score is over 660, I would think with today's rates a rate of 5.25% would be fairer.

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