Posted on: 22nd Dec, 2009 01:35 pm
i have a primary mortgage with a debt balance of approximately $64,000.00
i have a second loan that was a home improvement loan (not a home equity loan). i had to submit contractor bids and the payments went directly from the bank to the contractor. as i understand it, this is a 2nd lien. the balance is approximately $20,000.
is this an a6? is there any way i can roll the two balances together to get a better interest rate if the two balances equal more than 80% of the value of my home?
i have a second loan that was a home improvement loan (not a home equity loan). i had to submit contractor bids and the payments went directly from the bank to the contractor. as i understand it, this is a 2nd lien. the balance is approximately $20,000.
is this an a6? is there any way i can roll the two balances together to get a better interest rate if the two balances equal more than 80% of the value of my home?
after going through your post what i can understand is that you've taken a 80/20 loan while purchasing the property and used the 20% of the loan towards home improvement. thus, the second mortgage can be considered as a texas a6 loan. however, as the loan was taken as a part of the home purchase, once you refinance the loan, it will not be considered as texas a6. to know more about this law, check out the given page:
http://www.mortgagefit.com/texas/a6loan-law.html#23849
http://www.mortgagefit.com/texas/a6loan-law.html#23849
Well, that's not quite correct, but your reply may still be accurate. Let me clarify, and see if it makes any difference.
I purchased the home in 2004 for $70,000. Over the course of the next few years, I made improvements while paying the mortgage. Then, in 2007, I took out a home improvement loan of (I think the original amount was) $23,000. Using that money, I made additional, extensive repairs.
If the value of my house at that time (2007) was about $80,000, 80% of that would have been $64,000, so I can't understand why the bank would have made the 2nd loan to me for $23,000 if they can only loan 80% of the value? But they did.
Now, my real estate agent has estimated that the value of my home has increased to a minimum of $97,000. It COULD be more than that, but I don't want to gamble on paying for an appraisal unless I'm pretty sure my refinance will go through.
I am currently paying $630 a month for the first note, and $271 a month for the second note. If I could roll the two notes together and refinance $84000 at 6.25%, my total payment would be more like $640 + insurance.
It makes no sense to me why Texas law would not allow me to roll the two notes together, since they've already allowed the first two notes??? They're not "protecting me" or my home, they're making my life much more difficult by having to pay the higher two notes.
Can you clarify this?
Thanks!!
I purchased the home in 2004 for $70,000. Over the course of the next few years, I made improvements while paying the mortgage. Then, in 2007, I took out a home improvement loan of (I think the original amount was) $23,000. Using that money, I made additional, extensive repairs.
If the value of my house at that time (2007) was about $80,000, 80% of that would have been $64,000, so I can't understand why the bank would have made the 2nd loan to me for $23,000 if they can only loan 80% of the value? But they did.
Now, my real estate agent has estimated that the value of my home has increased to a minimum of $97,000. It COULD be more than that, but I don't want to gamble on paying for an appraisal unless I'm pretty sure my refinance will go through.
I am currently paying $630 a month for the first note, and $271 a month for the second note. If I could roll the two notes together and refinance $84000 at 6.25%, my total payment would be more like $640 + insurance.
It makes no sense to me why Texas law would not allow me to roll the two notes together, since they've already allowed the first two notes??? They're not "protecting me" or my home, they're making my life much more difficult by having to pay the higher two notes.
Can you clarify this?
Thanks!!
Hi Lynn,
You had taken your second mortgage in 2007, i.e the time when the credit crunch had just started. At that time, lenders could offer home equity loans worth 125% of the home value. Thus, you may have received a second loan which when added to the first loan had exceeded your home value in 2007. As a result, you may have received $23,000 as your second loan.
Did the lender give you any reason why they won't allow you to refinance the mortgage? As far as I know, considering the present value of the property, if after refinance, the total mortgage financing is less than 80%, then it will considered as a Texas A6 loan. If the total mortgage financing after refinance is more than 80%, then it will be a normal refinance.
You had taken your second mortgage in 2007, i.e the time when the credit crunch had just started. At that time, lenders could offer home equity loans worth 125% of the home value. Thus, you may have received a second loan which when added to the first loan had exceeded your home value in 2007. As a result, you may have received $23,000 as your second loan.
Did the lender give you any reason why they won't allow you to refinance the mortgage? As far as I know, considering the present value of the property, if after refinance, the total mortgage financing is less than 80%, then it will considered as a Texas A6 loan. If the total mortgage financing after refinance is more than 80%, then it will be a normal refinance.