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Frequent Contributor
chartley3
Posts: 488
Registered: ‎05-23-2007

Looking to refi with cash back. What are my options?

Ok here are my scores as of today. EQ 533 TU 610 EX 600.
 
Other then refi-ing via FHA what other options do I have??
 
I have a 5/25 ARM that we closed on in April, At that time the loan was for 90,100 on a home appraised at 110,000. Right now I have just over 20k in equity in the house with another 5k possible since I just remodeled the bathroom. I dont qualify for a HELOC with the scores yet but Im looking to remodel the kitchen. Current interest rate is 9.99% and I would like to shave at least 1 point off if possible and get a fix loan rate. What other options do I have?
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007

Re: Looking to refi with cash back. What are my options?

Cash out refis typically cost quite a bit at close... Try refi to fixed for 30 to get out of the ARM... When the process is complete, and taking for granted your Revolving Debt UTI is in line - a HELOC should be within reach. As you will have a Paid current Mort TL and see some FICO amplitude as a result. HELOC is much better solution than cash out refi... YOU are in control of what the loan amount is... And it doesn't cast you if you need to use more at a later date. And you won't be stuck with early payment penalties.:smileywink:
 
Rob
Frequent Contributor
chartley3
Posts: 488
Registered: ‎05-23-2007

Re: Looking to refi with cash back. What are my options?

[ Edited ]
Thanks for the advice Rob. My Broker thinks if I go FHA on the refi it really woundnt cost me that much on the closing costs and he told me I could get an interest rate of 7% doing FHA. I spoke with my bank and they wont do a HELOC unless I had a mid score of 640 and all collections are paid. All my collections are medicals from my wife so paying those off at once would be about $2500 which I dont have right now.


Message Edited by chartley3 on 07-18-2007 12:37 PM
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007

Re: Looking to refi with cash back. What are my options?

Hey Chartley - If you go FHA, I don't think you can cash out... And this seems like it would be the best advice you can take right now to get out of the ARM and avoid PMI on the FHA loan as you seem to have greater than 20% equity. If you refi with FHA at 5% down, your equity position will increase AND you will be in a much better postion to leverage a HELOC. Your FICO will increase as a result of having paid your obligation in full to your current lender... Classic may not be that big a jump but RE Enhanced will certainly represent you as less risk than current.
 
Take the time over the next couple of months to employ the PFD strategies you read so much about on these boards and others. Dispute inaccuracies religiously and you would be surprised how quickly your FICO health will improve.
 
I know my response to your question may not be the one you wanted, but trust me HELOC is the best way to get money out of your real estate. And the closing costs on a cash out will prob be more than the cost to completely PFD / PIF your $2500 medical baddies.
 
Good Luck.
 
Rob
Frequent Contributor
chartley3
Posts: 488
Registered: ‎05-23-2007

Re: Looking to refi with cash back. What are my options?

Good Info Rob. I may do that if push comes to shove. Getting a fixed rate with no money out of pocket would be nice. Doesnt solve my remodel issue in the short term but if my scores get a nice bump from paying off the mortgage then I cant complain.
Regular Contributor
OneMortgageGuy
Posts: 255
Registered: ‎06-08-2007

Re: Looking to refi with cash back. What are my options?

FHA will cost you two points.  I also know you can get a subprime heloc at 14.625 with a 580 and up Fico. The rate sucks but it is out there!
Established Contributor
FICO_Focused
Posts: 905
Registered: ‎05-09-2007

Re: Looking to refi with cash back. What are my options?



OneMortgageGuy wrote:
FHA will cost you two points.  I also know you can get a subprime heloc at 14.625 with a 580 and up Fico. The rate sucks but it is out there!



YIKES!!!!!!!!!!:smileysurprised:
 
Rob

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