- My Forums
- Tiger Rant
- LSU Recruiting
- SEC Rant
- Saints Talk
- Pelicans Talk
- More Sports Board
- Fantasy Sports
- Golf Board
- Soccer Board
- O-T Lounge
- Tech Board
- Home/Garden Board
- Outdoor Board
- Health/Fitness Board
- Movie/TV Board
- Book Board
- Music Board
- Political Talk
- Money Talk
- Fark Board
- Gaming Board
- Travel Board
- Food/Drink Board
- Ticket Exchange
- TD Help Board
Customize My Forums- View All Forums
- Show Left Links
- Topic Sort Options
- Trending Topics
- Recent Topics
- Active Topics
Started By
Message
Paging GFunk or any anyone in the home mortgage lending business
Posted on 9/20/17 at 5:39 pm
Posted on 9/20/17 at 5:39 pm
My friend, Bill Clover is looking to potentially consolidate two loans into one.
His first loan (primary mortgage, conventional) was originally for 15 years at 2.875 %. He has 10 years left before he reaches the loan's maturity date.
His second loan (Home Equity Loan) was originally for 15 years at 4.49 %. He has 12 years left before he reaches the loan's maturity date.
The loans were taken out at different times by he and his wife, Lucille.
If he were to consolidate his loans, he said he would refinance into a 10 year loan term, so it would keep his first loan term the exact same as it is today, but shave off 2 years on his second loan.
First question. Is this considered a "cash-out refinance loan" even though he all the equity will remain in his home, once the second loan is paid off?
His first mortgage loan to value is approximately 49 %. His cumulative loan to value (factoring in 2nd loan) is approximately 59 %.
Second question. Is it possible to obtain an interest rate at or near his current rate of 2.875 % in order to make this something he should further look into?
I currently see 2.88 % rates for 10 years on Zillow, with approximate closing fees estimated around $1500.
Suggestions? He doesn't have an account, but will be reading your replies.
His first loan (primary mortgage, conventional) was originally for 15 years at 2.875 %. He has 10 years left before he reaches the loan's maturity date.
His second loan (Home Equity Loan) was originally for 15 years at 4.49 %. He has 12 years left before he reaches the loan's maturity date.
The loans were taken out at different times by he and his wife, Lucille.
If he were to consolidate his loans, he said he would refinance into a 10 year loan term, so it would keep his first loan term the exact same as it is today, but shave off 2 years on his second loan.
First question. Is this considered a "cash-out refinance loan" even though he all the equity will remain in his home, once the second loan is paid off?
His first mortgage loan to value is approximately 49 %. His cumulative loan to value (factoring in 2nd loan) is approximately 59 %.
Second question. Is it possible to obtain an interest rate at or near his current rate of 2.875 % in order to make this something he should further look into?
I currently see 2.88 % rates for 10 years on Zillow, with approximate closing fees estimated around $1500.
Suggestions? He doesn't have an account, but will be reading your replies.
This post was edited on 9/20/17 at 5:40 pm
1
Posted on 9/20/17 at 5:50 pm to Will Cover
Not a cash out. He should be able to lock in 3.00% with normal closing costs easily. Might get to 2.875% on the right day with the right lender.
Posted on 9/20/17 at 6:45 pm to HYDRebs
quote:
Not a cash out.
I just spoke with Bill again. He said his mortgage company on his first loan (he called them first) said that the reason why his rate his higher (was quoted 3.125 %) is because he is looking to do a "cash out refinance loan."
Does this vary from lender to lender? Or was the person he was speaking to misinformed?
Posted on 9/20/17 at 9:04 pm to Will Cover
It's considered a cash out refi unless you are paying off purchase money loans. If the 2nd mtg was taken out after the purchase of the home, then combining the 2 now would be considered a cash out refi. Slight hit to the pricing, but nothing too bad. Be happy to discuss in greater detail.
Posted on 9/20/17 at 9:06 pm to Lsukj
Thank you for providing further clarification.
This post was edited on 9/20/17 at 9:43 pm
Posted on 9/20/17 at 9:11 pm to Will Cover
YGM
Posted on 9/20/17 at 9:49 pm to Lsukj
YGM.
Posted on 9/21/17 at 8:02 pm to Will Cover
Been busy and missed your question. It looks like you got what you needed. I will just say this...and it's a bit of an out of left field comment...
Why not just go with a 30 year amortization and buy your rate back down to the shorter am? You can always pay additional principal each month to achieve an early payoff. But by going with the longer am, you build in financial flexibility on the back end if-God forbid-you suffer a catastrophic financial situation. I.E.-Pay down the rate on 20 or 30 year term to get to the 10 year term rate. You give yourself a lower payment. You can still pay more each month but if you lose a job or a loved one has a health crisis that costs $$$, you can back that aggressive payment down to deal with potential curveballs in life. Or move back and forth to account for temporary bumps in the road. Etc etc etc.
I just am always wary of the idea of even financially well off folks putting themselves into a product that locks up their income in a higher monthly obligation when you can achieve the same term/payoff goals while giving them a lower monthly payment to plan for the unexpected.
Why not just go with a 30 year amortization and buy your rate back down to the shorter am? You can always pay additional principal each month to achieve an early payoff. But by going with the longer am, you build in financial flexibility on the back end if-God forbid-you suffer a catastrophic financial situation. I.E.-Pay down the rate on 20 or 30 year term to get to the 10 year term rate. You give yourself a lower payment. You can still pay more each month but if you lose a job or a loved one has a health crisis that costs $$$, you can back that aggressive payment down to deal with potential curveballs in life. Or move back and forth to account for temporary bumps in the road. Etc etc etc.
I just am always wary of the idea of even financially well off folks putting themselves into a product that locks up their income in a higher monthly obligation when you can achieve the same term/payoff goals while giving them a lower monthly payment to plan for the unexpected.
This post was edited on 9/21/17 at 8:04 pm
Page 1 of 1
Popular
Back to top
Follow TigerDroppings for LSU Football News