Posted: Wed May 27, 2009 1:42 pm Post subject: Refinancing in texas
Hi
We bought our primary home in 2003. I would like to refinance it into a fixed 30 yr. We have a first and second that were both initiated at the purchase. The second is a fixed rate mortgage not an equity. I would like to combine both loans into a first mortgage. The amount of the combined loan would be 80% or less than the value of the home. I keep being told that most banks will not do a cash out loan or they will but for a much higher interest rate. Could someone please explain this to me? Does cash out mean any loan that is consolidating two loans? _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
A cash-out refinance is a way of taking a new loan exceeding the outstanding balance of the current mortgage. This helps in paying off the the existing debts and using the extra money for some other purposes. If you consolidate both the loans into a single mortgage and refinance, it does not necessarily have to be a cash-out refinance. If the new loan amount exceeds the combined balance of the current two mortgages, then it will be considered as a cash-out refinance.
You've mentioned the amount of the combined loan would be less than 80% of the property's current value which is good in terms of the qualifying requirements. Now, if your credit score, income, DTI etc are also good, you should not have a problem in consolidating the two loans into one.
If you are finding it difficult to get a lender who can help you with it, I recommend a no obligation free mortgage quote with the lenders of this community. If you qualify in terms of credit score, LTV etc, they will contact you and offer you free mortgage quotes. If they can offer you a good interest rate, you can go for the loan. You should contact other lenders as well and get mortgage quotes from them. This will give you a lot of options to choose from and help you get the loan that offers you the best interest rate available.
jenkin7
