Refinance Mortgage

My home is valued at 500k , I have 10 years left at 5.35% and owe 200k. A second morgage for 30k at 6% and a buisness loan , 60 k at 7%. Everone will refinance me till I tell them I am self employed and record income of 35k . My buisness is a Retail Jewelry Store and I have over $300k in inventory(gold and diamonds,ect.) My credit card dept is at $40k , with a new lower rate re finance I could save $1500 or more in my monthly payments. Its nice to own a buisness , but I can not eat the jewelry , and to liquidate would mean OUT OF Buisness. Any suggestions , Mr President?

You are facing the problem that most small businesses have. Your declared income is low. Not only that it is dependent on you being able to work every day. If anything happens to you and you cannot work the business would be in trouble and you would default on your loans. Your equity ratios are high enough…50% on your home and 80% on your business but you do not make enough money on paper to fit the numbers that are required to qualify you. Your first mortgage payment alone takes you to the maximum amount that you can borrow at 33% of your stated income. For lenders you are high risk. Do not look for help but help yourself. You need to rework your balance sheet. Reduce your credit balances by selling some assets to pay off your highest cash draw debts. That way you improve your budgetary cash flow cycle. Work on improving your financial literacy. You have all the right personal finance tools…you just need to improve management of them.

I am trying to refinance on my condo with an fha loan. I have a 715 credit score. I was suppose to close by early april. They have all needed documentation and they keep telling me their waiting for the underwriter to make an exeption cause my income ratio is 2% lower than what they usually accept. I own two other properties which i took a loss on last year because i was rehabbing them which is the reason my income ratio is 2% below what they accept. Are they going to deny my loan or would they already have done so? I make 60k a year. The loan on my condo is going to be 138k. Of the 2 other homes i own one is completly paid off and the other one i owe 40k. I actually make a profit renting these homes but had to take a loss last year because of all the rehabb work i had to do. Why is lending tree giving me such a hard time and why are they so slow? Like i said i have a 715 credit score and have never been late on a morgage payment. Do you think underwriter will make an exeption in my case?

They will approve it They lenders have become quite skittish since they all are carry bad mortgages. Just hang in there

Our morgage broker is telling us that we should pay down our multiple credit cards to below 50% of available credit instead of paying off a couple in full and then closing the accounts. She says this will do more to raise our credit score. Is this true? We want to refinance our mortgage but my husband has a 694 credit score and needs it to be at least 700. (I have 749 so I’m fine.)

Your mortgage broker is right. Paying down your cards to below 50% of the available line (preferably below 30%) and keeping them open is a better strategy.

Your credit score is based on the following things:
1. If you pay your bills (at least the minimum amount due) on time
2. If you have had credit in your name for at least 5 years (longer is better) about 20%
3. If the total amount of outstanding debt is less than 30% of the available credit lines (less than 10% gets you outstanding credit scores).
4. You have a healthy mix of debt (not all credit cards or high risk places like payday lending, but some cc’s, some car loan some student loan, etc.)

Paying off a card helps with #3, but closing it hurts both #2 and #3 (since once you close it that line is no longer available to you and therefore the ratio of all other debt goes up).

What I would do is pull his credit report for free at www.annualcreditreport.com. See if there is anything on his credit report that violates one of the things above (such as late payment reported in error, or too much credit loaded onto one card pushing that ratio above 50%), you can correct that.

What is fastest way to pay off mortage. 30 yr and make an extra full payment a month or take a 10 yr at higher monthly payment and try to make an extra payment a month.

If you’re already in a 10 year and can afford the payments, stay in it.

A 10 yr is going to have a lower rate than a 30, and you’re already set up to pay it off in far less time.

I just quickly ran the numbers for a $150k loan under both scenarios at today’s rates. The 10yr mortgage saves you almost $144,000 in interest over the life of the loan. The savings is even more if your loan amount is higher. There’s no way that making the extra payments on the 30yr could ever save you that much.

The only way you would want to refi is if you can get another 10 yr at a significantly lower rate, but even then, if you’re more than a year or two into it, you’re better off sticking with the one you have.

Im (well a little deep) in debt. I can get out or back to normal anyway if i refinace. but im behind on my payments, a few months due to cutbacks at work. I have my Over time back now and i can make my payments larger to catchup…over a long time…Im not plaining on moving so how could i refinance with bad credit and behind on my payments so as to catchup and get a more stable payment…im on a fluxuating morgage

If you have some equity in your home I’m sure there are lenders out there who can do it. The market is softening right now and there are a lot of people in your situation, so don’t be ashamed to ask questions. Just call some lenders on the phone and without letting them run your credit, ask what you’ve asked here and see what types of programs they have. Good luck!!

I have outstanding debt and my credit is not good. I have a few rental properties and 1 property is killing me on the monthly morgage payment. I have tenants living in it but i still pay 700.00 out of pocket every month becasue the rate is so high and I have had trouble trying to refinance simply to lower rate. I was laid off and its getting worse. any options. please help.

Sell it.

My wife and I both have 2 jobs each and own a small 2 bedroom house, nothing special and still feel like we stuggle. Paycheck to paycheck. I just dont know what else to do. we pay a morgage of about 2000. a month for the house and we cant refinance because the market in this area has just fallen out.

I have no idea. I find myself asking that same question. Things where great 5-6 years ago in Central florida when the average home price was 125k.
The median price last year reached up to 250k. Yet the average household income only slighty increased in that time, a tad bit over 40k. We also have a much higher property tax and homeowners insurance to deal with.
I think thats why people are know leaving the state in groves. My guess is that they are going to more affordable cities. I recently say an article on forbes that speaks volume on this issue. There are places like Minneapolis, Cincinnati, and Houston where the average home is only 2-3 times income. I pasted the link below in case it is of interest.

http://www.forbes.com/home/realestate/2007/11/05/homes-property-affordable-forbeslife-cx_mw_1106realestate.html

my ex is signing over his half of the house to me. In return I will need to refinance the house to payoff credit card debts that he left me with, not to mention a 28,000 credit line debt.The morgage right now is 7,000.

If the credit card debt was incurred while you were married, you ARE on the hook for that debt IF, IF IF, the credit account was a JOINT account, or if it was a "secured" card even if your name wasnt on the card.

To answer your question, Go to the mortgage holder and tell them what you are doing. It sounds like you have some serious equity in the house.

Have them write you a NEW FIRST mortgage thats does the following..

1. Pays the old mortgage off
2. Pays off AND SHUTS DOWN the line of credit
3. Pays off ALL your credit card debt.

A home mortgage is ALWAYS going to be the LOWEST interest rate of ANY of the debts you mention, so it is smart to roll all that high interest rate debt into your mortgage, AND THEN SHUT DOWN THE CARD ACCOUNTS so the Ex cant get to them to try and back-door you into new debt…

You are thinking along the right track, just follow through and you’ll be fine…..

EDIT due to further information……. Were these the days when you could file bankruptcy and simply write off credit card, I would agree with the answerer below, but the bankruptcy laws have changed recently….

I say roll the credit card debt into the mortgage, because if she IS affording the payments, the interest accrues at a much lower rate on the mortgage, and if she pays the same amount monthly into her mortgage that she was paying on servicing other debt, the payment will pay MORE PRINCIPAL than keeping the accounts separate, and thus get her out of debt sooner rather than later….

Home appraised at $20 thou. below morgage. What are my options? Could save $1,000 per mo. if refinance at lower rate! At around 7%. Need advice!! Need to refinance!!

A ton of people are in the same boat. The best thing I could advise is for you to call your lender direct and request a streamline refinance. Typically, if you go through the same lender and have not been late on any payments within the last 12 months, they can refi you without an appraisal or income verification. A lot like a VA Interest Rate Reduction Loan or "IRRL" for short.

It appears that lenders do not refinance mobile homes that you dont live in. I own the mobilke that my son lives in. He pays the morgage.

It is hard to finance a mobile home. I had a pre-hud mobile home to finance and nobody would do it. So I found a private lender. Check with your local real estate companies. They will know some private lenders.

But of course private lender charge very high interest rates. Maybe 9 % or more.