budget question on refinancing

[robin09]

-I have a 30 year mortgage with 25 years left on it. We have an 8.15% mortgage.

I want to refinance, but the house is in renovations. Long story short, it was a 2 family, back to one, back to 2 and now once again it's a one. My hubby said no more renting out to help people, seems I have a soft heart to people that have young children....no rent, no money and totally destructive, after we had to evict the last couple, hubby knocked out the bathroom so I couldn't do it again .

Anyway, with rates so low I want to refinance, but the house really won't appraise well... we do all the repairs ourselves, when there's extra money...

Does anyone know where I can go to refinance.... the house was builty in the mid to late 1800's....

 

[cglaura]

-I have a 30 year mortgage with 25 years left on it. We have an 8.15% mortgage.

I want to refinance, but the house is in renovations. Long story short, it was a 2 family, back to one, back to 2 and now once again it's a one. My hubby said no more renting out to help people, seems I have a soft heart to people that have young children....no rent, no money and totally destructive, after we had to evict the last couple, hubby knocked out the bathroom so I couldn't do it again .

Anyway, with rates so low I want to refinance, but the house really won't appraise well... we do all the repairs ourselves, when there's extra money...

Does anyone know where I can go to refinance.... the house was builty in the mid to late 1800's....

When we refinanced they didn't take the condition into consideration. In fact, we had a hole in the kitchen floor from water damage, that we were in the process of re-doing (decided to remodel). Because of that, we had all the kitchen stuff piled into one room, so he could only open the door and look into that room. He said the look more at size, lot size, what type of heating/cooling, age of home, comps in area...and general upkeep of the house (as in, they can tell you are working to improve, not just letting the home go to rot.).

 

[sookie]

Your house will have to appraise for the loan amount so yes... Condition may make a difference.

Who did the work... DIY vs professional... Should not as long as all of the work is complete and everything is in proper working order.

 

[SPBendersky]

Why r you on an 8.5% mortgage? Rates are at 4.5% with good credit and a house that will appraise. You will have to have the house all together for a bank to lend and I would suggest a 20 year that will save a large percentage of the cost over the life.

 

[RachelEllen]

I don't think they will look at condition, but, they will appraise. Do you have 20% equity? We just refi'd our 15 year mortgage down to 10 years. We're paying about the same but will be done 5 years sooner! The shocker, however, was how awfully our house appraised. We brought 20% to the table in the beginning and had been paying $1000/month extra principle for 2 years. We still had to bring substantial cash to the table to refi!

 

[robin09]

When we remortgaged it in 2006, we were happy with the rate....BUt then we were hit with an area wide flood, lost our pants... and survived it. In the middle of it all we tried to help others, and our house was abused when we allowed others to live upstairs.

We are in the process of returning it to a single home.. and would love to refinance, I just don't know if I can in its shape...

Ideally I would sell in a couple of years and move down south.. the winters up here are too long and icy. But when we bought the house, we said we'd only be here for 2 or 3 years, as it was a good investment.. here we are 12 years later....and we've come to love our small community....

 

[Claire&TheBoys]

I'd probably start at zillow.com and get a ballpark estimate of what value it gives your house (not knowing the condition thereof) and the others in your neighborhood. You know how much you owe on your current mortgage. You might subtract 20% off the value it gives to account for the condition, and see how that figure compares to what you owe.

 

[Shelly F - Ohio]

You mentioned you want to move in a couple years then its not wise to refinance. refinancing works best for those who plan to stay in their house 8 or more years.

Keep in mind that the value of houses have dropped over the past 3 years and if yours in under repair your appraisal will come in very low. You may have to come up with a large down payment to refinance because most banks want 20% down.

So if you original house was appraised at say 175,000 and you took out a mtg for 168,000 and given the fact you have only lived here for 5 years your loan balance is $160,000 now.
Then you have the house appraised again to refinance and it is now worth 155,000. Which is less than you owe on you mortgage therefore you have no equity in the home.
You will have to come up with 20% down which would be $31,000 plus the difference between what you currently owe and what the new refinanced amt is. Which would be (old mtg amt 160,000-new loan amt 155,000) $5,000. So it would take roughly $36K to refinance the home.

A lot of people don't realize that the value of their house has now dropped over the past 3 years and so are finding it harder to refinance when you have only lived in your house for a few years.

 

[vicki_c]

I tend to agree with Shelly - without stellar credit AND 20% equity and/or cash on hand, you are probably going to have a hard time refinancing regardless of the home's condition if you purchased your house around 5 years ago or so (of course depending on what house prices have done in your area - there are some areas that didn't crash and burn).

We also have an interest rate over 6% and I would kill to refinance - but we lost our all our equity when the market collapsed (the 25%+ that we brought to this house!). Unfortunately, with the housing prices in my area, I don't have another 20% to put in. So we're just waiting it out. Forever, I guess!

 

[puffkin]

Yes, you should refinance if you can. That will be completely dependant on the appraisal and if you are at that 20% equity.

We are in the middle of a refi (taking our 30 year down to 15) and we were shocked by our appraisal and how low it is. We built our house right before the market really soared in our area and put another $20k in improvements in a few years ago and our house only appraised a hair over what we built it at. Thankfully we aren't underwater, but most of our neighbors probably are because they built at the height of the market. As I told my husband, we just paid really expensive rent for the last 6.5 years

 

[It's A Small World]

We're in the process (have been for the past month) of refinancing. What a nightmare! It's the 2nd time I've refinanced and this takes the cake in terms of difficulty. Due to recent mortgage crisis, money is not being loaned. We've lived in our house for 12+ years, have enough liquid money in the bank to pay what we currently owe off, but because my hubby has not been with his current employer for 2+ years and I an independant marketing consultant, this process has been brutal. My only advice is to remember it's not as easy as it once was to refinance.

 

[Plumeria9]

-I have a 30 year mortgage with 25 years left on it. We have an 8.15% mortgage.

I want to refinance, but the house is in renovations. Long story short, it was a 2 family, back to one, back to 2 and now once again it's a one. My hubby said no more renting out to help people, seems I have a soft heart to people that have young children....no rent, no money and totally destructive, after we had to evict the last couple, hubby knocked out the bathroom so I couldn't do it again .

Anyway, with rates so low I want to refinance, but the house really won't appraise well... we do all the repairs ourselves, when there's extra money...

Does anyone know where I can go to refinance.... the house was builty in the mid to late 1800's....

I refied last fall, you can do it too! I started checking out all of my resources - bar membership, AAA, Costco, whatever. I found an offer through the Texas state bar w/ Quicken Loans, so I checked it out. I had already gotten ballpark estimates from Bank of America (forget it!) and USAA, which we are members of. Quicken gave me an awesome deal, I couldn't be happier. If you want my guy's info, DM/PM me.

 

[asoko]

I tend to agree with Shelly - without stellar credit AND 20% equity and/or cash on hand, you are probably going to have a hard time refinancing regardless of the home's condition if you purchased your house around 5 years ago or so (of course depending on what house prices have done in your area - there are some areas that didn't crash and burn).

We also have an interest rate over 6% and I would kill to refinance - but we lost our all our equity when the market collapsed (the 25%+ that we brought to this house!). Unfortunately, with the housing prices in my area, I don't have another 20% to put in. So we're just waiting it out. Forever, I guess!

Do you know if your loan is owned by Freddie Mac or Fannie Mae? Both have programs that go up to 125% loan to value. Freddie Mac Relief ad Fannie refi plus/DU refi plus. I would ask your current mortgage company about it. Fannie has a website to see if your loan is owned by them.

 

[DawnM]

Do you have really good credit? I ask because we got our first loan on this house 5 years ago and got a 30 year at 5.37%. Your rate is quite high, which makes me wonder if it is a credit issue.

We did refinance to a 4.37% two years ago but we also went to a 15 year.

They were VERY picky about that 20% and our house came in way under where I thought it should come in at. They did mention projects we were working on and that it brought down the value a bit until those were finished.

Dawn

 

[vicki_c]

Do you know if your loan is owned by Freddie Mac or Fannie Mae? Both have programs that go up to 125% loan to value. Freddie Mac Relief ad Fannie refi plus/DU refi plus. I would ask your current mortgage company about it. Fannie has a website to see if your loan is owned by them.

Thanks, but no our loan is not owned by either. I checked that in the past.

 

[wintershawl]

I would say it doesn't hurt to just go to a loan company.... whoever you choose and ask. We just did a refi, and they only did a drive by appraisal. It could just be a matter of location for us. It doesn't sound like everyone gets it to be that simple. It did make a big difference in our payments.

It simply doesn't hurt (or cost) to start asking companies. That would be my suggestion.