What score you need to do a Refinance

[Anonymous]

I own a co-op in ny----i bought it at $66,000--- now it worth 200,000.  I read that if you have over $100k in equity you can always refinance.  

1) what do you need to show for refiance

2) what are the lowest scores , im in process of raising my scores

3) im an independent contractor----for a company

but i have last years taxes where i  made 73k

my original interest rate was 4.85  however i would like to take out equity to invest...80K

4) Is it wise to refi or do equity loan

the equity loan rates are 8%---so no matter if i refi or take equity the payment amount will be the same----

help

[ShanetheMortgageMan]

What you've been told if you "have over $100k in equity you can always refinance" is not always true, but it can be, depending on the entire situation.  The percentage of equity in your home is more important than the dollar amount.  Someone who owes $2m on a $2.1m home isn't going to be able to refinance... someone like you who owes $66k on a $200k home could likely refinance.

1) Items such as paycheck stubs, W-2's (or in your case 2 years tax returns), reserves/asset statements, Photo ID/SS card for Patriot Act Compliance, are just some of the documentation you will need.  Depending on your entire situation, more could be needed.  The lender takes care of ordering the appraisal & title work

2) No credit score can be acceptable, depending on your situation.  What are your credit scores and what is your credit like?

3) How long have you been an independent contractor for?  Independent contractor is looked at as self-employment, and you need to be doing it for at least 2 years in order for it to qualify as employment.  How long have you been doing that, and is $78k your after expense amount or before expenses?

4) Is your 1st mortgage a fixed rate at 4.85% or will it adjust?

[Anonymous]

1) Items such as paycheck stubs, W-2's (or in your case 2 years tax returns), reserves/asset statements, Photo ID/SS card for Patriot Act Compliance, are just some of the documentation you will need.  Depending on your entire situation, more could be needed.  The lender takes care of ordering the appraisal & title work

I have two years tax return

2) No credit score can be acceptable, depending on your situation.  What are your credit scores and what is your credit like?

tru 589 ex 568  equ568

just added two new cards utlity was maxed  utilty will be brouht down by 3/1 added a two  5000 cards low utilty on both--i october a 30 late and in september a 30 day late--on two of my credit cards

3) How long have you been an independent contractor for?  Independent contractor is looked at as self-employment, and you need to be doing it for at least 2 years in order for it to qualify as employment.  How long have you been doing that, and is $78k your after expense amount or before expenses?

Im not really a idependent contractor-- I work for a comany instead of w2--- i do w9 i think

4) Is your 1st mortgage a fixed rate at 4.85% or will it adjust?

its a fixed mortgage

[ShanetheMortgageMan]

Well, the good news is your debt to income ratio looks like it'll be OK, and you have sufficient equity in your home in order to get some of it out... however your credit scores, and the fact that there are recent late payments, will hurt your refinancing options.  You won't be able to obtain a home equity loan/line of credit with your scores, so your only option would be to refinance your existing mortgage... which is unfortunate since it has a really great interest rate, and the new interest rate you'd get wouldn't be so great.  You would want to try and get approved with a lender who uses automated underwriting, which would use your good debt to income ratio & equity in the home as compensating factors for your not-so-great credit.

[Anonymous]

i think im going to wait 30 days--myscore should increase---im working at it---it does not make sense to refinance..im working on my credit limits--they are maxed---paying them down and adding two other credit cards high limits low usuage.

[ShanetheMortgageMan]

You should be aiming for a 660 score and removing those late payments in the last 12 months.

[Anonymous]

I have been told twice that a median score of 680 was needed...we are in the same situation, waiting on scores to increase so we can refi and bring down our payments (because of a 7.625 rate and $600 in PMI). Right now we have around 640 median, and about 52K in equity...trying to be patient and hope rates don't climb back up.

[ShanetheMortgageMan]

---

HinH wrote:
I have been told twice that a median score of 680 was needed...we are in the same situation, waiting on scores to increase so we can refi and bring down our payments (because of a 7.625 rate and $600 in PMI). Right now we have around 640 median, and about 52K in equity...trying to be patient and hope rates don't climb back up.

---

You were told a 680 score is needed for a new home equity loan, or to refinance?  How much is owed on your home?  $600/mo in PMI is pretty high, but not if you have a largish loan amount.

[Anonymous]

We wanted to refi and a local company told us we needed median 680's, I got an ambiguous answer from Quicken Loans (wanted to go FHA or something like it). When we bought our house last July/August, they submitted our scores and got an "expanded approval" (do not remember the level, but we were on the verge of a regular approval) and with our scores we were told our PMI would be $602 on a 100% loan of $287,000 at 7.625% which equates to a $2833/mth payment.

Since then, our scores have gone up(both of us should be median 640 FICO) and we believe we would get somewhere around $85-$90 /sq ft (we purchased for $75/sq ft), which is not enougth to do away with PMI, but with a lower rate and higher credit scores, we could pay off some debt / finish some high profile things in our house and still lower our payments.

[ShanetheMortgageMan]

---

HinH wrote:
We wanted to refi and a local company told us we needed median 680's, I got an ambiguous answer from Quicken Loans (wanted to go FHA or something like it). When we bought our house last July/August, they submitted our scores and got an "expanded approval" (do not remember the level, but we were on the verge of a regular approval) and with our scores we were told our PMI would be $602 on a 100% loan of $287,000 at 7.625% which equates to a $2833/mth payment.

Since then, our scores have gone up(both of us should be median 640 FICO) and we believe we would get somewhere around $85-$90 /sq ft (we purchased for $75/sq ft), which is not enougth to do away with PMI, but with a lower rate and higher credit scores, we could pay off some debt / finish some high profile things in our house and still lower our payments.

---

Ah, I understand now.  Because of the increase in your scores, plus the equity you have in your home now, you should be able to reduce your monthly PMI.  PMI is mainly based on your credit scores, the type of approval you get, and the loan-to-value (on a refinance, new loan amount vs. appraised value)... probably could reduce your interest rate as well.  Quicken has a neat website, but that's about as far as they impress me... with their $300 application fee and employees generally treating the company more as a "job" and not a "career", they aren't on my top list to get a mortgage from.