Posted by Wayne-NC on August 20, 2001 at 06:50:19:
Chris, if this is investment property you cannot get 100% LTV loans. If it is your primary, you can refi to 80% LTV then get a 2nd to get your equity out but it won’t be 20k due to closing costs. How is your credit? A good mortgage broker can put this togeher for you. Yes, interest rates are different for investment property. Try a cash-out refi with a lower rate. Maybe you can get some cash and keep your payments the same. Realdata.com can help you figure payments with the new interest rate. Hope this helps. Where are you in Fl?
basic finance questions - Posted by chris(FL)
Posted by chris(FL) on August 19, 2001 at 19:14:12:
I am trying to understand the refinance phenomenon.
I am one of those people who can get the grasp of an idea well when I see the whole thing drawn out and can see the relationships, but have trouble with vagueness when it comes to numbers.
Lets say I own a property worth $60k. The loan was done at 8% so piti I have a payment of $548.59. I owe $40k. I want to get my $20k in equity out. I can refi and get what? I need someone to take it from there and show me what happens to the numbers. Instead of $40k in debt, I now have ____ in debt, and because I now have _____ in debt at a new ______ interest rate my payment changes to _______.
Are interet rates the same for refi’s as they are for orininal loans?
Do refi rates change if the property is not my personal residence as they do with oringinal loans?
Why do refi rather than a 2nd?
Thanks for helping a newbie out,
Re: basic finance questions - Posted by dewCO
Posted by dewCO on August 20, 2001 at 14:00:56:
Yo do a refi, if the interest rate difference is at least 2% in your case (because your loan amount is so low!!). May be you don’t even do the refi, because your lower payment won’t be that much lower even with a 2% difference in interest rate!
You can get the equity out with a 2nd or a cash/our refi. If you are an owner occupant, the interest rate will be the same for a refi as a purchase, provided, if it is cash out, that you don’t have a loan amount higher than 80% of the value (by an apapraisal, done by lender) of the property.
Go to a mortgage calculator program and you can play with the numbers on different interest rates to see if it’s worth it. You take the difference between your current Princ. & Interest part of your payment and the new P&I payment. If that is say $20, then you divide the cost of the new (refinanced loan) which will be $4,000 or so, by $20 a month and that number is the number of months it takes for you to actually get a benefit from the $20/mo. savings.
Be aware, that it rarely makes sense to refi such small loan amounts, in my opinion, and I’m a mortage broker and couldn’t do my own refi cheap enough for me to do it!!! Just call your lender and see if they will do a streamline refi—which means they will lower your interest rate for little or no cost (ask them how much!!!), and then take out whatever you can on a 2nd homequity line of credit. Shop BANKS in your area, they usually have lower interest rates! for your 2nd. (The interest rates are higher on a second, that’s why people usually do a refi and take out the cash, but again, lenders don’t like cash out over 80% of the value, and usually homequity lines will let you go to higher LTV).