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jspruiell · Joined: 18 Jun 2010 Posts: 1 1.56 Dollars($)

I am surely hoping that you can give me a definitive answer on this.

My house, in Southlake, Texas, has appraised (this is a recent appraisal) for $500K. I presently have a 6.25%, fixed-interest, 30 year, mortgage for $350K. This is classified as a "cash-out" loan. (Before divorce, I owned the house free-and-clear, but had to get a mortgage to pay my ex-wife her interest in our community property.)

I still owe approximately $340K, having only had the loan for two years.

I want to refinance this house, for a loan amount of approximately $380K, in a LIBOR-based, 7/1 ARM, 3.625%, 2% variance per year after year seven, 5% cap on adjustment. No pre-payment penalty or balloon of any sort.

"Loan Company A" has assured me that they can offer me such a loan. (Their underwriting department is presently reviewing my application.) "Loan Company B" says that Texas law does not allow such a loan.

Who's right?

Thanks much,

Johnie Spruiell
18 June 2010

netherton · Posted: Fri Jun 18, 2010 10:25 am Post subject:

Texas absolutely has different rules regarding cash out refinances but that isn't to say definitively that the second guy doesn't have some special product that is different than what the majority of lenders can offer in Texas. Not every lender has the exact same loan products.

Sorry we couldn't be of more assistance but there is no way we can call the second loan company a liar without all the facts. Have you looked them on the BBB?

Guest

Thanks Nic. That also has occurred to me, that Loan Company B simply may not have an ARM-Cashout loan product that they could legally sell me in Texas, while Loan Company A's ARM-Cashout loan is perhaps just a little bit different and, thus, legal for sale here.

The BBB has nothing to report -- good or bad -- on Loan Company B. Loan Company A is accredited with BBB.

Does anyone else know the firm answer to this, given the loan information in my original post?

Thanks,

Johnie Spruiell
18 June 2010

jameshogg · Posted: Sat Jun 19, 2010 12:54 am Post subject:

Hi Johnie,

As far as I can understand, you may not face any difficulty in refinancing your home loan. You should speak to few other lenders and check out what they have to say in this regard. Moreover, I don't think you should worry as the first loan company is already reviewing your mortgage application.

Thanks.

Guest

Thanks jameshogg. While I invite any additional comments from anyone else, you're probably right about just not worrying about it. Assuming that the first loan company will underwrite the loan for me, then I'll be happy!

adonis · Posted: Mon Jun 21, 2010 12:03 am Post subject:

Hi Johnie,

I agree with what James has said. You should keep in touch with the first lender and check out when you would be able to get the mortgage.

netherton · Posted: Mon Jun 21, 2010 4:51 pm Post subject:

Jonnie--One other route that may allow you to see if the lender can deliver the loan without incurring the expense is to have the lender put the file through underwriting and provide a full credit approval pending appraisal coming in at value.

That way you can know they truly have the program available and can fund the loan prior to you shelling out the dough.

Guest

I am having the same exact issue today. I'm curious to know if Jonnie was able to get the ARM. I am trying to get a 5/1 ARM. Lender A says he can do it and Lender B says that Texas law does not allow this.

Guest

More thanks to Nic and Adonis. Hey crousemd, I'm still waiting to see if my loan will go through. -- Johnie

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