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Is it possible to combine ARMs and then Refinance?

I got my home purchased a year ago and I have two ARMs. I am just hoping to combine both of them and refinance. Does anyone know of any such financial institution which can help me [url=http://www.mortgagefit.com/refinance.html]refinance[/url]? What shall I need to do or what all do I need to be informed of? I shall first of all approach the banks that offered the previous loans and find out what they have to offer?but will they send me an appraiser since it has been over a year from the purchase date that my house has been appraised for? And if you need this, well I don't know though,we had added cabinets in kitchen and a small shed in the yard.

Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

An appraisal holds good only for 3 to 4 months after it has been conducted. So, you should have a fresh appraisal done on your property as sufficient time has passed after the purchase.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

The bank will not send an appraiser until and unless it accepts your refinance application and starts off the loan process.

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charles.armbruster's picture
charles.armbruster | Joined: October 12, 2006 04:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Depending upon your location, it is possible that your increased equity -- as shown by a current appraisal -- can help provide the basis for a better financing program than you current Combo-financing. Obviously, a few factors will determine any advantage you will gain, being your credit score, your monthly debt-load apart from your mortgage, etc.

Please detail your circumstance for further assistance from this community.

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Samantha's picture
Samantha | Joined: September 16, 2005 11:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Charles, I do agree with you. Hansel can avail better financing options if his home equity is sufficient enough and an appraisal can help him to find out whether his home value has increased.

Hansel, it will help you a lot if you read through the fine print of the refinance loan program. This is to ensure that you sign a deal from which you can benefit in the long run. You may go for a fixed rate loan as you wish to combine two ARMs and I guess you haven't been able to cope up with increasing payments. However, if you wish to stay in the property for a short term, you may think of going for an interest-only loan; otherwise you can avoid this option.

God bless you.

Samantha

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ckalvesmaki's picture
ckalvesmaki | Joined: January 28, 2006 06:28 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Posted: 06 Jun 2007 04:28 Post subject: Combine ARMs and refinance

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I got my home purchased a year ago and I have two ARMs. I am just hoping to combine both of them and refinance. Does anyone know of any such financial institution which can help me refinance? What shall I need to do or what all do I need to be informed of? I shall first of all approach the banks that offered the previous loans and find out what they have to offer? [color=Blue:6440304067]That is an option however if your current loan was or is a subprime loan you may be dealing with a subprime lender that doesn't offer conforming loans...so who is the current lender[/color:6440304067]? but will they send me an appraiser since it has been over a year from the purchase date that my house has been appraised for? [color=DarkBlue:6440304067]It depends on the lender and the loan program.....some lenders will use an AVM or autovaluation model to determine the value of your house and on a conforming loan the AU(automated underwriting) systems will determine what if any type of appraisal is needed[/color:6440304067] And if you need this, well I don't know though,we had added cabinets in kitchen and a small shed in the yard.

In order to help you we need a little bit more information.
1. What is the balance on both loans?
2. what is the approximate value of the house.
3. What are your credit scores?

Hi Hansel,

With a little more information we can offer some mored advice

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charles.armbruster's picture
charles.armbruster | Joined: October 12, 2006 04:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hansel: All homes change in value over time -- after one year your home may or may not have changed enough to see any benefit from a corrected financing program (i.e. - a refinance). Certainly, advice from a local realtor and/or a mortgage professional like myself can give you a good idea as to the relative shift in your local values -- I don't believe that you can assume the addition of new kitchen cabinets and a shed will improve your value to any great degree over normal appreciation for your area. Traditionally, additional square footage of living space and appliances and bathrooms and upgraded kitchens will improve the value. If the cabinets give the kitchen an entriely new look, perhaps they will benefit you on appraisal. I suggest you speak with a local realtor as to the approximate resale value of your home today, as though you were considering putting it on the market. If you like the number, order your own appraisal for $350 or so from someone the realtor might recommend. If your mortgages are 90% or less of the new appraised value, and your FICO score is over 660, it is likely that you can improve your monthly cash flow with a new single mortgage. Good Luck!

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miller_st's picture
miller_st | Joined: January 17, 2007 04:47 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Hansel,

[quote:e70237d560]And if you need this, well I don't know though,we had added cabinets in kitchen and a small shed in the yard.[/quote:e70237d560]

As Charles said:
[quote:e70237d560]Traditionally, additional square footage of living space and appliances and bathrooms and upgraded kitchens will improve the value. If the cabinets give the kitchen an entriely new look, perhaps they will benefit you on appraisal.[/quote:e70237d560]

I too agree that it will help to improve the value. One of the board members who happens to be involved with the appraisal industry (Mike) also suggests that such kind of improvement does help in increasing value of your home, check more about it from here - http://www.mortgagefit.com/appraisal/homeowner-questions.html

Miller

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Samantha's picture
Samantha | Joined: September 16, 2005 11:59 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

Hi Hansel,

If you are willing to refinance, start shopping with some lenders and collect information about the rates of interest they're offering; check if you're getting a lower rate compared to that of your existing loans. Ask lenders about the closing costs and whether you need to pay points.

It's important to know about the closing costs as these vary from one lender to another and requires one to shell out a lot of money. And, in case you wish to know what happens in the entire process, just go through the topic, How to refinance your current mortgage.

Hope this helps...

God bless you.

Samantha

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charles.armbruster's picture
charles.armbruster | Joined: October 12, 2006 04:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

As to costs for a refinance, remember that the 'found equity' in your home will pay for the refinance in most cases. If your loan amout to home value to 90% or less, you may only need to pay for the appraisal out-of-pocket, a cost of approx. $350 nationwide. Knowing this, some homeowners will actually buy-down the interest rate to an even lesser monthly payment with the equity they have in the homes -- as long as they are convinced the money saved in their monthly payments is more than the cost of the buy-down, they can come out ahead -- otherwise, depending on the length of time the homeowner will be in the home, the money saved may not be of concern.

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adonis's picture
adonis | Joined: October 22, 2005 05:04 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

You mean going for a no-cost refinance? but i guess the costs are hidden in the loan and that's the reason why one has to pay slightly higher rate. That's because the costs are initially paid by the lender as these are included into the loan; so the lender will somehow try to get back that extra money and charging a higher rate is one of doing it.

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Anonymous's picture
Anonymous | Joined: June 8, 2004 01:06 am | Posts: 0 | Location: New Jersey | 00 Dollars($)

Thanks to Charles, Miller and Ckalvesmaki for all your responses. My credit score is in the 650-680 range, the balance being $150,000. the home value is what i haven't found currently and even if i do not go for an appraisal, could a realtor help me in this?

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miller_st's picture
miller_st | Joined: January 17, 2007 04:47 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

[quote:5a4456f1c7]Thanks to Charles, Miller and Ckalvesmaki for all your responses. My credit score is in the 650-680 range, the balance being $150,000. the home value is what i haven't found currently and even if i do not go for an appraisal, could a realtor help me in this?[/quote:5a4456f1c7]

Hansel, you score is quite good, you can get to know how much your house is worth from a realtor, a kind of price opinion. It would rather be an estimate of how much your house is worth which is based on similar sales data available from your neighborhood. Depending on it you can figure out what you next step should be if it is more than the combined loan balance.

Miller

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charles.armbruster's picture
charles.armbruster | Joined: October 12, 2006 04:26 pm | Posts: 0 | Location: New Jersey | 00 Dollars($)

An appraisal is an estimate, a snapshot in time, of the home value -- this is why lenders keep a time limit on the 'use' of the appraisal to determine the loan amount -- much like the Credit Report has a 'life', since credit standing can change with time.
Also, a realtor's 'guess' will be just that -- realtors act as go-betweens, which is why you can sell a home as 'for-sale-by-owner' -- realtors are not a necessary part of the picture, but they sure do help! Certainly a realtor can tell you what has sold recently, but just like a home inspector can only properly tell you what needs to be done to upgrade or repair your home, only an appraiser can put a number on the property worth going to the bank with -- and, although the buyer normally orders the appraisal, I'd suggest doing it yourself ($350) and having your realtor/mortgage guy put the cost back on the buyer at closing. Give it a shot - because right now, you are simply prolonging the inevitable, especially since you have a buyer in the wings. If you have to sell the home for less than you owe the bank, so be it -- at least you will not have a foreclosure messing with your credit for lots of years.
Only an appraisal will do the job -- some homeowners pay for an appraisal every couple of years simply to keep tabs on their home's value, a smart way to watch your best asset if you refinance to use the equity for improvement, debt-consolidation or 'round-the-world vacations.

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