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jambobsnyder · Joined: 20 Nov 2009 Posts: 1 1.48 Dollars($)

My husband & I got licensed in Texas so we could build our own home. When our bank went to move the interim construction loan to a mortgage, the government had changed the laws 20 days earlier stating that home builders cannot build their own home and we could not find 1 mortgage company that would take on the construction loan because of the new law. So, our wonderful banker was able to convince his bank to take on the mortgage for 12 months (he had 3 other builders with the same exact problem). We have to refinance next summer and I'm worried about finding a lending company to take on our mortgage. Our credit score is not great and we owe about $40,000 in credit cards and have a $240,000 mortgage on a $120,00 salary. Because we built our own home, we saved about $60,000 - which happens to be 20% of the value of the home - so we were able to avoid the PMI. SO - my questions are...
1. what are the chances that we will be able to find a lending company to take on our mortgage
2. would we possibly be able to consolidate the $40,000 in credit cards when we refinance since we have so much equity? Or should we?
3. Can our current bank demand us to sell our house if we can't get approved?

smithsussane · Posted: Fri Nov 20, 2009 10:30 pm Post subject:

Hi jambobsnyder!

Welcome to forums!

You haven't mentioned what your credit score is like. You should note that if you want to get a refinance, you should have a credit score of 720-740. Moreover, you should have equity in your property. As far as I know, you won't be able to consolidate your credit card debts while you refinance but you will be able to use the extra cash you receive towards your credit card debts.

It will be your current bank's discretion whether or not they would ask you to sell off the property. You must have signed an agreement with your current lender. Check it out to find if it mentions any such clause.

Feel free to ask if you've further queries.

Sussane

gmakerley · Posted: Sat Nov 21, 2009 1:17 pm Post subject:

your current mortgage lender has no business advising you to sell your home. that shouldn't even be part of the conversation.
and if you signed "an agreement" as noted by sussane, shame on you.

if you have sufficient equity to pull out the $40K you need to pay other debts, then lenders will generally allow that. however, since you're in texas, don't take what i just said as gospel, as i know that the laws in texas are not akin to any other state. you need to discuss how you can obtain any cash out with the lender.

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What are the odds I can get refinanced on new construction?