I am in search of a good Loan Officer that can work a refi in CA. I figured I'd post as much about my situation as I can, and let all of you pro's look it over and see if this is even a possibility.
I am looking to do a FHA 85% LTV cash out refi. I understand monthly PMI will be through the roof, but I am still interested in pursuing this because I believe I can pay off enough other debts to make it worthwhile. Here is all of my info:
FICO - 620-640 range
Current payoff amount - $212k
Home value - Zillow has it at $268,700 which I think is pretty accurate.
Mortgage - $1765/month. FHA mortgage originated in late 2009 for $227,500 and a rate of 4.875%. Payment is made up of $1,204 P&I, $97 PMI, $114 Hazard/Flood Insurance. $290 property taxes, and $60 for an escrow shortage from the escrow review that was just completed in November (property tax escrow was short).
HOA - $114/month
Car Loan - $417/month.
Debts to be paid off with the refi money:
Unsecured Loan - $229/month. Balance $8,400
Credit Card 1 - $75/month. Balance $2,500
Credit Card 2 - $25/month. Balance $750
Credit Card 3 - $25/month. Balance $600
Credit Card 4 - $25/month. Balance $200
Personal Loan from a family member. Balance $7k. No monthly payment currently being made. I realize that I won't get enough cash out to pay this one off (unless the appraisal comes in higher), but if I can even pay $2k or $3k on it, that would be great.
I have a short sale on my credit of my previous residence. It finalized at the end of 2011, so it has been more than the 3 years that I have been told FHA requires. I also have been told that this pretty much limits me to FHA.
I have very little in reserves, and need to pursue options that result in the least amount paid upfront by me (preferably nothing other than appraisal). I understand the tradeoff is usually a higher rate, but I am ok with that, so long as I am at least breaking even from a monthly expenditure point, and getting to pay something toward that personal loan. I figure, even with the increase in PMI, I can refi again in a year or two when I have 20% equity and get rid of that PMI and start seeing a real monthly savings. I know rates probably won't be as low at that time, but I doubt they will climb enough to make my P&I climb more than the $250+ I'll be paying in monthly PMI.
I tried to do a similar refi this past summer/fall, but hit a few snags. First, many lenders wouldn't touch it because of the short sale. I did find a couple or loan officers that were confident they could get it done by using the "extenuating circumstances" loophole, but failed to do so. I did pay for an appraisal in the summer, and it came back lower than anticipated ($260k). A few comps in my gated community recorded a couple of weeks after the appraisal was completed that I think would have resulted in a higher appraised value had they been included. I am hoping, now that several other comps have recorded supporting a higher value, and that I am beyond that magic 3 year mark for the short sale, that I can get this done.
What I would like to do is work with a Loan Officer that can thoroughly pre-qualify me through DU or whatever programs you guys use AND have someone that knows what they are doing review comps in my area and get a feel for whether or not my appraisal will come in high enough before proceeding. I understand that Loan Officers can't guarantee what an appraiser will value my home at, but I'd at least like an opinion. My house was built in 2007, and all of the homes in my neighborhood are pretty cookie-cutter. My house has no major damage anywhere or anything like that, so I am confident that a thorough review of comps by someone who knows what they're doing would be pretty close.
Sorry for the long-winded post. I just wanted to supply as much info as I could upfront so you all could use it to hopefully steer me in the right direction. Any comments/recommendations are appreciated, and as I stated above, I am actively looking for a loan officer.
Thank you all very much in advance for your time, and I hope everyone is off to a happy/healthy 2015!
I did read all your post.
From outside looking in, your plan seems to just shuffle money around, and in the end going to be a wash. You do the refi and the numbers will just be shifted from this guy to the next.
I had a friend in simlar situation. He increased his INCOME by taking a parttime job. He delivered pizzas for 1000 dollars a month, then went to UPS on the late shift and slung boxes, for 13 per hour. He was not young guy either. The man lost 25 lbs in 3 months at UPS. He said it was the hardest work he ever did in his life. He worked partime on the night shift, came home late, slept a few hours then went to his regular job. In 18 months he paid off couple of loans, and his credit cards.
I know every situation is different, but sometimes the reality is just have to have more money coming in.