Refinancing a personal loan before mortgage app?

[ebokee]

I took out a personal loan with onemainfinancial early last year and recently recieved a call from them about refinancing it. They told me that it would include a credit inquiry and that I could use any extra money for closing costs. Anyone have any knowledge about this sort of thing? I plan on applying for the mortgage around Oct or November of this year. Will it hurt my mortgage chances if I did this?

[StartingOver10]

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@ebokee wrote:

I took out a personal loan with onemainfinancial early last year and recently recieved a call from them about refinancing it. They told me that it would include a credit inquiry and that I could use any extra money for closing costs. Anyone have any knowledge about this sort of thing? I plan on applying for the mortgage around Oct or November of this year. Will it hurt my mortgage chances if I did this?

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Not a good idea.  You have much better choices for closing costs than One Main Financial.  You can get a seller concession for up to 3% of purchase price on a conventional loan and up to 6% on a FHA loan.

Or have the lender pay a portion of your closing costs. The lender will have to bump the rate a bit but it is much, much better than what One Main offers in terms of rate and overall terms of the loan.

If you have the ability to get a gift from a relative, that is an option or lastly, borrow from your 401k if you can (but consider this last).  

[ebokee]

Thanks but do you think that I should refinance my loan with them at least so that my payments will be lower? Do you think that the inquiry would hurt my chances?

[StartingOver10]

What is the current rate on this loan and your current payment and balance?

[Anonymous]

How much longer do you have on your current payment term?  IMHO, I'd rather deal with higher payments for a short time than smaller payments and double the term especially if you're considering buying a home. You could always get the seller and lender to pay most, if not all closing costs. 

[ebokee]

Off the top of my head I cannot give the exact rate right now but I'm sure that you know it's up there since it Onemain after all. The loan is now about a little over $7000. Payments are $235 a month. Do you think it will be worth it it to refinance it at my local credit union instead of onemainfinacial? I planned on paying the whole thing off by the end of the year before I applied for the mortgage anyway. It was just the call that I recieved from Onemain yeasterday that me to thinking about all of this.

[ebokee]

I've only had the loan 1 year.

[Anonymous]

I haven't had any dealings with Onemain personally but have heard their rates can be brutal.  The credit union is always a great choice!

[Anonymous]

IMO I'd refinance elsewhere or pay it off if I had the funds.  If your plan is to purchase a home by the end of the year, you can always save that $235 each month until closing. 

[ebokee]

Would it hurt me to get the inquiry to refinance? I already have a few credit card inquiries from December.