Refinance Mortgage

My husband and I are currently paying PMI (Private Mortgage Insurance) on our mortgage. (We have no second mortgages.) I know we need twenty percent equity in order to eliminate PMI, but I don’t think we’re quite there. Is taking out a home-equity line of credit to pay down the mortage a good idea? I know that we’d then have two loans to pay, but the PMI would be eliminate and all of our payments (minus the interest) would be going toward the loan rather that insurance. Is it possible to get a home-equity line of credit for 6%?

To eliminate PMI you have to get an appraisal done to verify the your equity. An equity line of credit is a variable rate based on prime rate. I believe it is around 7-8% right now. I personally feel PMI is ok becuse HELOC’s are adjustable and you would end up paying more interest over time than insurance in most cases. You should contact your bank to see how and when eliminate you can stop paying this insurance (sometimes you cannot eliminate PMI for at least two years). If you calculate your interest payments on the HELOC to be less than PMI and you can pay the balance off quicker than having the insurance for two years then it’s a winner.

If somebody used the equity in their home to get a mortgage (home was paid off, except for $30,000, then home was refinanced with a $200,000 mortgage with $160,000 in cash going to homeowner, $30,000 to pay off the previous mortgage), is this mortgage eligible for loan modification? Or are only loans that were used to actually purchase a home eligible?

It should be eligible for modification as long as the owner is the one living there. If it is an investment property, than no.

We own our house fully No mortgage value approx $550k. We are thinking that we like to retire early to near the beach. Currently we found nice homes with land in that area for $175k. Is it better to get a home equity for the full cost of the Beach home plus any other small debit (approx $75k 2 cars and a timeshare) or continue to pay on the individual debits and add a Mortgage for the Beach house?
The ultimate goal would be to get settled into the 2nd home and then sell the current home pay off the balance and then put the rest in an investment with monthly dividends to use as retirement income until we reach retirement age and also maybe get a parttime job.

I am a mtg broker. I would do a fixed HELOC and combine all your debt into it. If you pay all your debt separate, you are paying interest on the cars, credit cards, etc which are NOT tax deductible. Your mtg debt is.

Congrats on having your home free and clear!

I own a flat which has approx £20,00 left on the mortgage. Can I take the equity out of this flat (approx £150,000) and put it towards a new flat?

Sometimes you can obtain a Home Equity Loan and use the proceeds towards the purchase of the new one. Read the docs carefully. See whether the HELOC requires you continue in residence in the first flat. The new mortgage will assuredly require you to be in residence unless you put down larger down payment and pay higher rates for investment property.

My mother just passed away, and left the house that I am living in to my brother and I. What would be the best way to finance the half value owed him?

If you want to buy him out, home equity may be the simplest (may not be the best) option./

my mother in law is selling her £110,000 house to me for £80,000. Can i use the £30,000 equity of the house as my deposit for my new mortgage? If not could she sign over the house with its debt to me and I re-mortgage it to pay her and her debt?
Thanks

A couple of issues here:
1) If the house is truly worth 110K, you are getting it too cheap and the tax man will assume that this is to hide a gain. Also, stamp duty is owed on the actual value, not the discounted rate you want to pay.
2) Assuming that the current fair market price of the house is 80K, there is no equity. If the value is 110K, then there still is no equity as far a mortgage lender is concerned because the maximum that you can borrow is set as a percentage of the lower of the sale price or value. So if you can buy it at 80K, the max. mortgage will be, say, 90% of 80K and you will have to come up with the 8K yourself.

In short, you can never have the mortgage lender view any discount in the purchase price as the down payment.

I do my own taxes every year, but this year I have a question. I refinanced my mortgage in the spring. Had a significant amount of equity and decided to "cash out" some of my equity to help pay off some outstanding debts (car, student loan, credit card balance) and kept some to keep in saving (so it’s accessible, if needed). I know the government tries to take a piece of everything, but this is MY money. It’s not "wages" — does that make a difference?

No.

You report equity on your home when you sell it. Then, you subtract your total costs from your home from the selling price to figure your profit on the sale. If you are single and have owned your home for two years or more, the first $250,000 is not taxable income. If you are married, the first $500,000 of profit is not. Any amount above and beyond that amount or if you have not lived in your home as your primary residence for more than two years, all profit is deductible.

My brother helped me buying the house off. Now I need to finance the house to pay him back. Will this be considered a new mortgage, a refinancing or an equity loan (since they have different interest rates…)
thanks!

Definitly go with a fixed rate first mortgage..

As the other responses tell you, you will simply borrowing against your property that you own free and clear. It will be considered just a new first mortgage (refinance).

You definitely do not want a Home Equity Line of Credit..even though every LARGE bank in america tries to advertise and SELL these loans, they are a bad move for any borrower. Not only are they bad for your credit, you will have a much higher interest rate.. Banks try to SELL them to people because they make much more money on a equity line of credit..

I would also advise that you work with a nationwide lender that has a portfolio of investors. The reason i say that is becasue if a loan consultant can shop your loan for you among their many investors, you will get the best possible loan program for yourself. What i mean by that is you will get lower fee’s, lower rates, and faster service…

My name is Jason Fry, and I am a loan officer with Providential Bancorp, a nationwide mortgage lender. I’d be happy to assist you in a refinance, or at least be able to let you know exactly what YOU QUALIFY FOR. You can then make a more informed, and educated decision whether it would be the right move for you.

Feel free to give me a call at 312-264-6448, or
you can email me at Jasonf@providential.com.

Thank You,

Jason Fry
Providential Bancorp

So that your second payment will be based on a 30 year fixed rate rather than a refi. Will it be a smart thing to do. When you sell out you can pay the second mortgage with the first and still walk with remainder of equity. Is this legal and does it make since.

I don’t think you’re going to find a 30-year second, and seconds usually have higher rates. Better to refi with equity out and get a new 30-year fixed.

The value of my home has declined but I would like to get a lower interest rate, especially on the home equity loan. Help.

hmm… not sure if they’ll refi you, but I called my bank and asked for a loan modification and dropped my interest rate a couple points.. I only went out of pocket about $300 and saved myself $300 a month on my mortgage.. so, call your bank and just ask them if they have any loan modifications or "streamline" refinance options available.