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Message
I have a question about a mortgage at a local bank.
Posted on 3/28/12 at 2:05 pm
Posted on 3/28/12 at 2:05 pm
It is a 15 yr mortgage loan, but I have to renew it at the end of 5 yrs (and that is coming up). It is with a local bank and they will only go 5 yrs at a time. My credit is good, but income is not high at this time.
Will I have any problems rolling it over for another 5 years? Thanks for any opinions on this..
Will I have any problems rolling it over for another 5 years? Thanks for any opinions on this..
Posted on 3/28/12 at 2:12 pm to ole yeller
why would you do that? thats called a balloon loan and i have never understood why people do them. You can contact a mortgage lender and get a 15yr rate at 3% right now, and i bet the rate on that loan is higher than conventional mortgages right now.
Posted on 3/28/12 at 2:18 pm to hawkeye007
When I got it 5 years ago interest rates weren't as low as they are now. I bought some land and just used my house as collateral, it seemed to make everything easier at the time.
Will be talking to the banker soon, so I was trying to get prepared. Thanks,
Will be talking to the banker soon, so I was trying to get prepared. Thanks,
Posted on 3/28/12 at 2:37 pm to ole yeller
quote:
ole yeller
quote:
It is a 15 yr mortgage loan, but I have to renew it at the end of 5 yrs (and that is coming up). It is with a local bank and they will only go 5 yrs at a time. My credit is good, but income is not high at this time.
Will I have any problems rolling it over for another 5 years? Thanks for any opinions on this..
The 5 year crap means it has an adjustable or baloon payment issue. Get out of it & refinance. They're just screwing you over.
Do not be afraid to tell him you'll take your business elsewhere. As a local bank, they may be able to write to different guidelines, though their board may be the ones limited their types of instruments in terms of what kinds of mortgages they can offer.
Don't really know enough information other than to say you should jerk your money out immediately & refinance it somewhere else that makes sense.
Posted on 3/28/12 at 3:09 pm to GFunk
quote:
The 5 year crap means it has an adjustable or baloon payment issue. Get out of it & refinance. They're just screwing you over.
Obviously, locking in for a longer term right now would be preferable, but this isn't a normal mortgage. He said:
quote:
I bought some land and just used my house as collateral, it seemed to make everything easier at the time.
That could be the difference.
There is no way I would ever do a balloon on my house though. If they don't refi, then you have to find someone else or hand over the keys? No. fricking. Way.
To the OP, I would look into replacing the loan with a "second" mortgage on a 10 year amortization. I think you can probably score that a lot easier than the system that you currently seem to have. Alternatively, you may have enough equity in the land to get a mortgage with a lien on the land, instead of your house.
Either way, I would probably refi right now if you took the loan out 5 years ago, as rates are much lower now.
Posted on 3/28/12 at 3:26 pm to TheHiddenFlask
Thanks for the input and the reason I did it the way I did was I had worked with the local loan officer before. The land is in Miss and it was a lot easier to get an appraisal on my house than hunting property.
My main concern is my loan officer has retired and there are a lot of new loan restrictions in place. I'm just not sure that I could get a conventional loan at this time. Thanks,,
My main concern is my loan officer has retired and there are a lot of new loan restrictions in place. I'm just not sure that I could get a conventional loan at this time. Thanks,,
Posted on 3/28/12 at 4:10 pm to ole yeller
yeller you dont know until you try. its worth the 10 mins of you time to call someone and find out.
Posted on 3/29/12 at 4:24 pm to ole yeller
This sounds like a loan with a Savings and Loan, not a bank. They finance unusual properties/borrowers with unusual circumstances and also hold the mortgage - they don't sell them because the mortgage usually doesn't meet standard underwriting guidelines for whatever reason. They use 5 years as the max loan term because of future interest rate risk - who knows what rates will be in 6 years? No one. So they make you refi every 5. It's a very legit business, but not one to be used unless you have extenuating circumstances precluding you from qualifying for a normal mortgage that can be sold into the market.
Posted on 3/29/12 at 6:46 pm to GrantTheFan
The bank is carrying its own paper. It is not in their best interest to tie up their rates for 15 yrs when rates can change drastically. If rates were going up and exceeded your current rate, you would be screwed when the balloon came due.
Call a mortgage broker or another bigger bank. They should quote you a 15 year conventional. If there is an issue, have the local bank do the raw land and the broker do the house. Multiple benefits in this.
Call a mortgage broker or another bigger bank. They should quote you a 15 year conventional. If there is an issue, have the local bank do the raw land and the broker do the house. Multiple benefits in this.
Posted on 3/31/12 at 12:25 am to ole yeller
The last loan was a cash out loan, those are tougher to get approved and have a higher interest rate. Now you would be looking at a rate/term refinance and those are easier to get approved. If your total debt to income ratio is less than 45% and you have good scores, you should not have a problem getting a conventional loan.
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