Need to refinance w/cash out

Asked by Nikki, Chicago, IL Tue Apr 7, 2009

I am in need of a refinance w/cash out. I don't know who to trust or if I should wait to improve my credit score. My home is worth 130k I currently owe 104k on my loan. I am in an ARM with a 8.65% rate due to adjust again in May. My credit score is in the mid 500's. Please advise if it is wise to refinance now or wait and try to improve my credit score. I was told that an FHA was more suitable for me. Then I also heard that I need at least a 620 to qualify. Please help, any suggestions to reputable lenders would be helpful.

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Dp2, , Virginia
Sun Apr 12, 2009
You definitely need to work on improving your credit score, and you should contact your lender to see if you may re-modify the terms of your loan.

Cash-out refinancing opportunities have largely dried up for most conventional lenders; however, all isn't lost. Depending upon what you intend to do, and depending on whether your estimate of the current market price is based upon the results of a recent (within 2 months) inspection, you may have other options: use part of your equity as cross collateral, a floating mortgage with a subordination agreement (which is albeit less common in residential real-estate than in commercial), etc.
0 votes
Sean Cochran, Mortgage Broker Or Lender, Naperville, IL
Sat Apr 11, 2009
Hi Nikki. You really do need to improve that score. I do work with 1 lender that is still doing sub 620 scores but you have to have a very low DTI and at least 6 months of reserves. Basically, the rest of your file has to be very clean. If you think you might fit this, give me a shout.


sean cochran
quality mortgage lending
0 votes
Kurt Clements, Agent, Schaumburg, IL
Tue Apr 7, 2009
you need 620 - improve your score. also, fha just announced as of 4/1/9 that their max for cash out is 85% of the value of the property.
0 votes
Christopher…, Agent, Chicago, IL
Tue Apr 7, 2009
Dear Nikki,

I'd suggest calling either:

Daniel “Dan” Larkin, Senior Mortgage Consultant
Wintrust Mortgage
600 Hart Rd. #115
Barrington, IL 60010
312-952-8068 (C)
847-277-1781 (off)
847-620-2591 (f)

Jae McPherson
Chicago Bancorp
1555 Naperville-Wheaton Rd.
Naperville, IL 60563
630-388-1300 x 253 (off)
312-212-5473 (f)
312-617-1723 (C)

Either one of them should be able to help you with getting your scores improved and getting refinanced out of your current loan if possible. Good luck.

Christopher Thomas
Broker Associate, Sudler Sotheby's International Realty
773-418-0640 (cell)
0 votes
Cindy Vedder, Agent, Irvine, CA
Tue Apr 7, 2009
Nikki, You can also call your current lender and ask them for help with restructuring your loan. They will ask you for all types of paperwork, income, expenses etc. Some lenders are having home mortgage counseling seminars you might ask about that as well. Here is a site that offers useful information and other links. I would start here so you know what to ask. HUD is a great resource for informing buyers/consumers. Good Luck Nikki. Cindy Vedder, Prudential California Realty
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