Do I qualify and other questions...

[sjlcjl]

Situation.. 

Currently have a 1st ($111,000) 30 year 5.875% backed through Freddie Mac

and a 2nd ($50,000) 20 year 8.25% through GMAC

These were loans that were origionated in the middle of 2006 and my ex-wife is on the loans

Went through a divorce, all of that good stuff but have since been cleaning up my financial situation. 

I want to refi/take advantage of better rates and get my ex-wife off of the loan. 

My specs...

• Credit score, currently 696 but expect to get in to the 720 range at the end of the month due to some revolving debt reduction
• Have some lates from 2008 a couple 30s on two credit cards and one of them was a 30 on my current 1st.
• I gross $5,200 a month before bonuses and have been at my current job for 13 years.
• My monthly debt is my current home loans and some credit card payments. Total of $1,600  ($1450 mortgage, $150 credit card)
• Property is a primary residence in Richmond, Va and is a single family house
• I do not have an apraised value other than what I can pull from Zillow of $142,500 with a range of 133k-164k
• I have $10,000 available in a savings account...

I'm looking to go to a 30 or 15 year fixed depending on how much better the rate is at 15 years.

I assume it makes more sense to keep the $10,000 as a downpayment since I'm most likely at 100%+ LTV than to pay down credit cards (~$8000 which is 24% utilization) to help increase my score a little more?

Thanks for the feedback!

[JM-AM]

You could qualify, your only set back reading your post quickly will be the appraisal.

Making the assumption you are doing this to take ex wife name off and get a lower rate.

When you have some time, speak with an LO or Broker and discuss it with them.

[Kozmo]

I'm a little confused.


Are you looking into HARP?

Realistically that's the only option I see here. Unless of course your appraisal comes back high....really high.

On the first your roughly at 78%LTV and that's assuming zillow is close. There are lenders that will do HARP under 80% but you have to call around. They wouldn't touch the 2nd though. And her name would still be on that loan so I don't even know if any of this would even make sense.

You owe $161k combined and even with your $10k that doesn't bring you into the realm of combining the two.


Your fine in terms of credit and all that as long as that 30 day late on the first wasn't in the last 12 months.


You can either do the first with HARP or sit back, hold on to that $10k and wait to see if you can get closer to an LTV where you can do a traditional refi, take care of both and get her name off both.

Or, like I said before maybe the appraisal comes back high, but it doesn't sound like it would.

[sjlcjl]

Thanks for the replies..  

Zillow has a history of being low (for me)..  I refied this loan in 2006 with a loan value of ~$180,000 (appraisal covered the loan) and Zillow gave a value of $136,000 in 2006. 

I'm not delusional thinking it would have that much of a decrepancy still yet.

However, the same house with a one car garage sold last year for $171,000 right across the street..  I'm hoping improvements add a little to help get me over the hump (landscaping, stamped concrete walks, 400sq deck)  So that gives me a little hope.. 

I had looked at the HARP program and saw that I wouldn't be able to do anything with the 2nd regarding removing my ex's name so that kind of eliminates that move for me.  Unless I can do a HARP on the first at a decent rate and just hack away at the second and refi it when the LTV gets resolved.   Would the HARP program be a total new loan that would remove her from the loan?

What other source besides getting an appraisal could I better estimate the value?

This has been an ongoing journey..  When the value of the house was high, I had way too high of a DTI and poor credit score because of it.  Now that I have a little bit of money and my credit situation has turned around, the value of the house is low..    Life is funny like that..

Thanks again for the help.. 

[Kozmo]

Well, HARP will absolutely take her off the first, but again your stuck with the 2nd. With your LTV on the first and your score you should have no problem getting into the 3.5-4% range. But again, stuck with the second.


Honestly, I would talk to a realtor that is VERY familiar with your neighborhood and pick their brain on your home value. Or bite the bullet and get an appraisal.

Even if an appraisal came back at $175k you'd still have a little work to do to get to an LTV to cover both loans and to cover closing costs. And that's assuming your using that $10k to help with your equity.

Truth be told there are some damn smart LO's and brokers on this site as I am not one of them. Maybe they can think of something?

But I'm just not seeing it. And if it were me I don't know that I would want to refi down to 4%, still have the second, and refi again in the next 2 years and pay closing costs again and possibly have a higher rate. But again I'm not a LO! So maybe there's something out there for you.

[sjlcjl]

Well, I spoke with a loan officer and have started moving forward to refi my 1st. 

It is through a HARP program and I have a rate of 3.99%..  Said there wasn't really anything that could be done to the 2nd other than just chipping away at it and the home value coming back up. 

Paperwork is in progress and all of that happy stuff.