What option would be best to get money from my mortgage?
by Mortgage Rates on Tuesday, November 16th, 2010 | 4 Comments
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Remember these words – Banks are Sharks – they will devour the weak.
Only refi if you can get the percentage 2 points lower and if you will stay in the house another 5 years at least.
Remember closing costs – big money maker for banks.
And do not dare do anything with a variable rate – banks are still trying to scam the uneducated.
HELOC is a much better alternative if you need money.
Have you consdiered making a loan from your 401K?
You will have to prove hardship so take your medical bills with you to the HR meeting.
You get a nice loan and pay yourself back the interest.
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they will not give you a heloc or any cash out as you are at 93% of the value and must be less than 80% to take any cash out. Instead of sending any additional to the principal note work on the bills and then pay any revolving debts to way less than 30% of the available.
That will get your scores up enough if the rates drop enough to refinance the note
I am a mortgage banker in TN
You can’t get a HELOC. They only go to 80% of the appraised value, and you owe more then that already.
Hi J Dizzle. There are a lot of issues here. First, you really need to learn a lot more about money management. A good place to start would be to watch the Suze Orman show and to read some of her books (or other books on money management).
You need to understand the concept of “equity”. The “equity” you have in your house is the value of the house (if you were to sell it) minus the amount you owe on the house (mortgages). So, if your house is worth $200,000 and you owe $175,000 on the mortgage, your equity is $25,000.
To refinance, get a 2nd mortgage, etc. in today’s financial markets, you will need at least 20% equity in your house. Again, if your house is worth $200,000, you need equity of at least $40,000 to do any form of financing.
Never, never, never use your house to pay off credit card debts. If you default on the credit card debts they CANNOT take your house from you. But, if you default on your mortgage, they will take your home away from you!
Never, never,never use your retirement plans to pay off credit card debt. If you should have to file bankruptcy, your retirement plans are protected – you cannot lose that money. That money is safe.
Use the money you have been paying extra on your mortgage to pay down your credit cards and medical bills. When you have paid off all of your credit cards and medical bills, then your credit score will improve. At that point you can look into refinancing your mortgage.
Last point. A GOOD banker will NOT rip you off. He/she will advise you to do what is in your best interest. Do not hesitate to review all of these issues with your banker. Note: a mortgage broker is in one business and one business only – the business of making money from selling mortgages. A mortgage broker is VERY DIFFERENT from your banker. Do NOT trust a mortgage broker.
Best wishes and good luck.