Second Mortgage Shop

what's the difference between refinancing and debt consolidation?

admin — Sun, 02 Nov 2008 14:02:31 +0000

I want to refinance and include my home equity loan and get extra money for a new car. What is the right option?

Refinancing reduces your current payments and you often can get money.

Debt consolidation is combining loans together.

So, refinancing is what you want.

I need a home equity line of credit or a loan?

admin — Sun, 02 Nov 2008 14:02:27 +0000

Whats the difference between a loan and a line of credit?
Do you think its ok to search for the lender on the internet or should I go to my bank who refused it 2 yrs ago even though my FICO score was over 700? Its 760 now.
Do most people get quotes for the work they need or do they just borrow over and beyond what they think they need?
What are they going to ask me for when I apply for the equity line of credit?

#1 - A loan is a one time amount of money lent to you. Once it's paid off, it's done. A line of credit is a revolving credit amount where once ou pay the amount owed of, you can use the credit again (just like a credit card).

#2 - It is best to either search online or find a mortgage/loan broker. A broker has far more access to different companies that might have different lending requirements so if you were declined by one place, they will be able to shop it to another.

#3 - If you get a loan, it might be required or at least a good idea to get a quote for the work that is being done. There's no point in borrowing money and paying interest on it, just for the sake of having some extra cash around. If you are taking a line of credit, don't worry about the reciepts…you are only charged interest on the amount that you spend on it, not the amount available.

#4 - They will ask you more or less the same questions whether it's line of credit or a loan, however, they are alittle more strict with lines of credit, becuase you need to be responsible for a longer period of time instead of just the duration of one loan term.

If a 2nd mortgage was included in a bankruptcy and discharged. Do they still have a claim to the property?

admin — Sun, 02 Nov 2008 14:02:23 +0000

We filed bankruptcy a year ago. We left out the first mortgage but included the second mortgage (home equity line of credit). It has been discharged, no one contested it and we haven’t received a statement or any other communication from them since. We want to sell the house now to our daughter. Does that 2nd mortgage company still have a claim to the property?

I assume that the home equity line of credit was secured by a Mortgage or a Deed of Trust. If that is the case, you have been discharged of this debt personally, but the second mortgage is still attached to the property and this loan will need to be paid off in full before the property can be sold to someone else with a clean title. The mortgage company typically will not contact you after a Bankruptcy, since they cannot require you to personally pay the loan. They do still retain the right to foreclose on the property, but in some cases they are not interested in spending the money to do that. The total payment due on the loan will include late fees and interest accrued since the last payment due on the loan. I would suggest first having a title report run to see if the loan still shows up on title (probably will). If it does, you may want to contact the bank to see how much they say is owed. You may be able to negotiate on the back interest and late fees.

Has anyone ever taken out a second mortgage?

admin — Sun, 02 Nov 2008 14:02:18 +0000

I am interested in taking out a second mortgage. I don't really want it for thirty years . Can I get it for 30 anyways and pay it off early without penalties. I only need like 35000.

I took out a second mortgage to get some new windows in my last house. I had some equity built up in it, so it wasn't difficult to qualify. Based on the small size of the loan (about 10K, I only financed it for 6 years.) I asked at the time and they said there would be no penalty for paying it off early. Ask to be sure. And when paying extra payments, but sure to specify it go towards payment of the principle, not the interest.

Is refinance or second mortgage a better option (specifics in details)?

admin — Sun, 02 Nov 2008 14:02:14 +0000

We bought our house in 2004 for $54K and have a 30 year fixed mortgage at 5.25%. Our balance on our mortgage is $47,500 Our house has appreciated and is now worth about $100K. We have student loans totaling $16K and credit card debt of about $10K. No car loans. We're expecting a tax return of about $4,500. We'd also like to add on another room to our house and have a quote for $7,500. We'd like to refinance for about $80-$85K. With interest rates getting back down to the mid to low 5% is it a better deal to refinance or get a second mortgage?

Thanks in advance.
My husband and I both have excellent credit.

Refi, w/o a doubt. Second mortgages tie you option-wise for down the road. You're in good shape here.

I'd refinance, pay off the debt put the room addition on, and you're sitting pretty.

Plus, based on having excellent credit, stress excellent credit, you're rate will close to the same as it currently is.

Nice job!

Get in touch with me if you want to talk about specific rates.