Financing in Lakewood>Question Details

Sandra, Other/Just Looking in Lakewood, CA

I have 2 loans and i want to refinance to combine them to one loan with a lower interest rate..

Asked by Sandra, Lakewood, CA Wed May 14, 2008

since the rates are low, but is it possible to refinance when home values are low and there is no home equity available.. I dont want to pull out any money I just want to refinance to combine my two loans and make it one at a low interest rate to maybe save some money.. Please advise

Help the community by answering this question:



You are wanting to do what so many home owners have already done...and in many cases it's a geat idea. Let me provide you with a bit of information that can make you a better borrower and avoid getting ripped off or making some wrong assumptions about the refinance process in our current housing market.

1. The term of the type of refinance you are seeking will be one of two:
a. if the two mortgages were taken out at the same time (i.e., to purchase your home) then it will be a "rate and term" refinance.
b. if the second mortgage was taken out after you closed on the first mortgage you took to purchase your home, then the term is "cash out". Even though you will not be taking cash out of your home's equity, most lenders will consider this transaction a "cash out" refinance.

2. If your transaction is a "cash out" refinance, most lenders have an upcharge for this program. This upcharge usually comes out of the price they pay the broker/banker. The amount of this upcharge varies from lender to lender but is usually .25% or less. This means .25% of the total new loan amount.

3. Be aware that in the present conditon of the housing market your appraisal might come in for less than needed to cover the refrinance. In this case you will most likely still be required to pay for the appraisal.

4. The refinance amount is limited to your credit profile and credit scores and the type of refinance (rate and term or cash out). Conforming loans (Fannie and Freddie) limit cash out refinances to 90% and rate and term refinances to 95%. FHA will allow 97% rate and term and 95% cash out refinances.

Good Luck!

Trey Bowden
Mortgage Lender
(405) 340-3277
0 votes Thank Flag Link Thu May 15, 2008
Hi there Sandra, I work with a lender who will be able to help you and show you all your options.
Drop me a line if you would like to know the best programs on the market for your particual situation

Kind Regards
Michael Barron
First Team Real Estate
(714) 552-6817
0 votes Thank Flag Link Wed May 14, 2008
Sandra: I work with a lender in your area who has been able to help some of my clients when no one else could. Without all the particulars of your situation, I cannot tell you if you are a candidate. It would be best if you speak with him directly. Contact me if you would like me to put the two of you together.
0 votes Thank Flag Link Wed May 14, 2008
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