cashout refinanceing with a score 0f 620

[tedune]

Hello everyone, I will try to keep this short.

I would anyone's opinion on refinancing with cash with a score of 620.

Basically I lost my job three years ago. so credit score is hurting and when the unemployment check expired. We had trouble paying for our mortgage.

Our last late Mortgage payment is now 13 months ago. We have no late mortgage payments. Saved 10,500, I am still not working but my Husband company moved from HOnolulu to Reno and offered him an attractive salary. we have lived in Reno for a year now and would like to purchase a home. We found 2 that we like very much both for around 320,000.

What we would like to do is a cashout refinance on our house in Honolulu to purchase one of these homes.
Our Mortgage is $195,000/ Mortgage Payment is $1755/ It is currently being rented out for $3100 a month
We would like to do a cashout of $350,000 To purchase the house in Reno.
My Husbands salary is $77,000 A year. We are paying rent a monthly rent of $1500
My questions refinancing doable with a score of 620 with a on time mortgage payment for the past 13 months. ( we do have up to 90 days late in the past 24 months for our mortgage) We have no car payments, only 1 credit card ( i use this for my auto bill pay only and it is paid off every month)
Should we wait for another 11 months so that our late mortgage payments are 2 years behind us. Any underwriter who looks at our credit score will we see that we strugglled with our Mortgage payments between 06/2010 to 06/2012 because prior to that our payments were spotless and after my husband got his pay increase in 06/20/2012 we have never been late.

Any Kind advice would be appreciated. This journey of repairing my credit has been a roller coaster.

[StartingOver10]

What is the value of your property in Honolulu?

I would think that it would be extremely difficult for you to get a cash out refinance of your existing property for a couple of reasons:

1) you have very recent mortgage lates

2) you are planning to take funds out of a investment property for the purchase of a primary residence in another area. This sets the lender up for a "buy and bail" situation on your part which is a huge red flag. 

What is a "buy and bail"?  If you take the money out of your current rental property and then buy something else - and then stop making payments on the current property (either letting it foreclose or deed in lieu or short sale).

^^^That is probably not your plan, but that's what it will look like to the lender given the circumstances you posted as to your current financials. JMO.

[tedune]

Thank you for taking the time to reply the property is worth $ 800,000.

[StartingOver10]

Well then, with that valuation and the potential remaining equity after the cash out refi, that info might change the answer. You aren't going to risk the rest of your equity to dump the property on the bank after you do a cash out refi. You may still have an issue with the late pays on the mortgage. It is worth checking with a couple of lenders to see where you need to be score wise in order to do a cash out refi in your area. And how far away you need to be (in time) from the most recent mortgage late.

[Sunshine85]

Any reason you're holding onto the house in HI? If possible, it might be a good idea to sell it, and use the proceeds to buy a new house in NV. 

[tedune]

Because it is a great investment. and My husband grew up in that house. We bought the house from his mom in 2001 when it was $395,000. and Now $800,000

My friend who is a real estate agent. Told me not to sell. He projects our house to double in value $1,600,000 by the year 2020. Rent is also expected increase and double by 2020. So instead of $3100, he projects I will be able to collect $6,000. In fact he said homes around our area has already seen an increase of $500 for rent. (He said we should increase it from $3100 to $3500) But we love out renters and they are planning to rent for 3 years so we didn't want to increase it.

We also to move back to hawaii when we retire. I think back to how lucky we were to able to buy the house at the time we did. The timing was perfect.

[tedune]

And to starting over 10

I actually took the property value from the state tax statement. we expecting the formal appraisal to come out higher. ten homes in our neighborhood sold for %1,200,000 with an average time on the market on the of 10 days. My friend who is a real estate agent is active in that area.

Thank you for responding. I sent out my financial papers out today. So We are keeping our fingers crossed. We are working with a loan officer in Hawaii.

when I told her about our credit she didn't seem concerned, just brushed it off. but I am concerened with a score of 622 and late payments I know I am not a best candidate for a cashout refinance. The size of the cashout worries me too that it may send a red flag to the underwriter. I guess I am just being neurotic. My Hubby says I am not Happy unless I am worrying about something.

Well everyone send a prayer or good thoughts our way and hope we will be able to get approved for our loan.

[tedune]

Okay the loan officer received all the documents yesterday. What' happens next?

Does the bank look at both fico scores an d credit report?