Should I refinance or withdraw from my equity?
BB asked:
I live in a surburb of Atlanta, GA. I have $30k of equity in my home. I need some money to do some minor repairs around my home. It is about $3500 worth included labor. I want to rent out my home and buy another the early part of next year. My salary will be increased by then. I will have two raises by then. My credit scores are 648, 648, 608. A bank has approved me for a refinance loan. My interest rate now is 5.5. I was just told by a friend that I will be better off going to the bank that my loan is with and withdrawing from my equity. I never heard of doing this. Do anyone have any suggestions on what I should do?
I have had my mortgage for 2 years. My monthly payment is $641. I have a FHA. My bank denied me for a line of credit about a year ago because they said I was late too many time. I have not been over 30 days late. It was went I was out on leave. The lates are not on my credit report. I never a new kitchen floors, new doors throught the home, the whole interior done, some upgrade, and plumbing work.
WINSTON
I live in a surburb of Atlanta, GA. I have $30k of equity in my home. I need some money to do some minor repairs around my home. It is about $3500 worth included labor. I want to rent out my home and buy another the early part of next year. My salary will be increased by then. I will have two raises by then. My credit scores are 648, 648, 608. A bank has approved me for a refinance loan. My interest rate now is 5.5. I was just told by a friend that I will be better off going to the bank that my loan is with and withdrawing from my equity. I never heard of doing this. Do anyone have any suggestions on what I should do?
I have had my mortgage for 2 years. My monthly payment is $641. I have a FHA. My bank denied me for a line of credit about a year ago because they said I was late too many time. I have not been over 30 days late. It was went I was out on leave. The lates are not on my credit report. I never a new kitchen floors, new doors throught the home, the whole interior done, some upgrade, and plumbing work.
WINSTON
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2 Responses to “Should I refinance or withdraw from my equity?”
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RODRICK
To many factors left out here, 30k in equity could be alot or a little depending on the overall value of your home, what type of mortgage loan program are you currently in, what type of repairs do you need to do, what is purpose of waiting to buy the other residence, how long have you owned the current one, are there pre-payment penalties on the current loan, are yo upaying PMI at the moment, etc, etc…
KEVIN
Contact your bank and see if you qualify for a line of credit - Also called a Home Equity Line of Credit (HELOC) For the available equity you have in your home… You did not mention what your current payment -But your interest rate you have now is really good, so I would hate for you got get a 100 percent loan at a 7 percent. A 90 percent loan would be roughly 6.5 percent. You will have to decide if it is a benifit to you to get out the 90 or 100 percent of your home value. How may years have you had your present mortgage? Take that into considerate also. Is it almost paid off, is it a new loan, have you been in it long enough that your Mortgage payment is now paying on your Principle Balance?
A line of credit, is given to you, You can use it or not use it, but it is available to you. They will give you checks to draw out what you need, and your payments are based on what you take out.
Another way is to get the full 4,000 up to 15,000 all at once, but you would be making payments on the full amount. Why not get the line of credit, use what you need now, Than in the early part of next year, if you need to use more, you can to use some of it for a downpayment on another place..
When you go to purchase (again), if you do not want to use a Bank, than Use a Broker. Why us a broker…
Talk with a broker, a broker underwrites for many company’s (I underwrite for 150 companies) so I only have to pull credit 1 time, and they look at my credit. A single lender (not a broker) has programs available, but they may not be able to help you and your situation, so you go elsewhere, and than that person pulls your credit (see what I mean.) If you shop, your credit is pulled and that is considered a soft pull, for a 30 day period. Just like shopping for a auto, it is good for 30 days. If you apply for a credit card, that is considered a “hard” pull and it drags down your credit score. When looking for a home, please do not apply for a credit card, Department Charge Card, Gasoline Card or make any major purchases, like a auto, etc. This will pull your credit down.
If you need help, check out my web site, and Good Luck to you - A Broker, who cares, will go over it all with you and be in contact with you daily. The one on one customer service is important, to you, the client, to let you know the whole loan process.