Forgotten Your Password?

Need to Register?

Question Icon

To refi or not to refi this is the question. May be moving for a job and forced to rent my townhouse.

I purchased a townhouse almost 5 years ago (June 2008) and the price of the homes in my community have dropped since that time. I have a split loan that was done to avoid paying PMI. The larger loan has an interest rate of 5.875% (now with a balance of $102K) and the smaller has a rate of 7.875% (now with a balance of $19,500). I have been looking at doing a Refi with a HARP loan because my employment also changed a couple years ago and it would be great to reduce my monthly bills. I am now interviewing in another state and have been looking for work out of my area for a little while. I have been hesitant to refi because I may have to rent my place until the market comes back to be able to sell if I do have to move for work. So, I'm not sure what types of things I need to consider if I refi now and then end up moving. I have been told I can rent at a later date with the HARP loan. Are there things that I need to consider so that I don't get myself in a tight spot with renting until its feasible to sell? Thank you for any advice wisdom you can lend me! by fotowe_697_301 from Nashville, Tennessee. Mar 20th 2013 Reply


Nancy J Releford (nancyreleford)
#5 ranked lender in Tennessee - 222 contributions

Under the Harp program, you can refi as a primamry, 2nd home or Investment property. The rate will be a little higher for the last 2. Normally you will sign an affadavit @ closing indication you will reside in the property for 12 months or longer.

Mar 20th 2013
0
0
Bartolomeo Castelli (BartCastelli)
#32 ranked lender in Missouri - 1,056 contributions

It really depends on the comfort level you have with various options that you have proposed. If you are planning on keeping your current home for investment into the future, then I would definetly consider refinancing. It really depends on the current value of your home, but you can easily look at doing a HARP loan on the first mortgage and keep the second. If there is a way that is "cost effective", then combine the two loans into one. If you ar needing to sell before you purchase another home, then it may not be cost effective if you are planning on doing this in the next 12 months. There are many options as questions you posed, and can be easily discussed with a lender you can trust. Which state are you moving to? It might be beneficial to establish that trust with a lender who can do loans in Tennessee and where you might be transfered to. Let me know as I have many Loan Officers in my office licensed in Tennessee and hopefully, in the state you are heading to. Contact me at 314-744-7806, or my website www.castelli.valuedlender.com

Mar 20th 2013
0
0

Nancy, Thank you. What happens if I sign an affadavit at closing indicating that I will be in my place for 12 months but then end up getting a job and having to move. I would then have to rent. Would there be a penalty? I just don't know what the future holds right now.

Mar 20th 2013
0
0
Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

There are options of qualifying the new rent on your current property for your debt to income ratio. Depending on the State of the new property we may be able to help you.

Mar 20th 2013
0
0
Linda Miller (Linda Miller)
#2 ranked lender in Utah - 566 contributions

Since you think you will be keeping the home for a while it makes since for you to refinance but you should do it now before you change jobs again and it becomes an investment property. The rate on an investment property is higher. If your home qualifies for a HARP loan you can refi the first to a much lower rate and save money each month - this will help your cash flow if you do have to rent. You should contact a Lender 411 mortgage professional in your area. I know you will get good advice. Good Luck.

Mar 20th 2013
0
0
Peter Savino (855411LEND)
#100 ranked lender in New Jersey - 332 contributions

Knowing that you maybe moving, I would not refi until you where sure and could be very accurate with the statements you are making to the lender. If the bank finds out your original intent to was to refi as a primary home and then move. You will have a problem. Depending on the lender it could be seen as Mortgage Fraud.

Mar 20th 2013
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,237 contributions

until you are certain you are moving, I would proceed with the refinance but pay attention to the fees. As long as at the time you refinance (through the day of closing) you are still working at your same job and have not been offerent another job I don't think there is an issue. By all means tell the loan officer and see what they say. In your situation it makes more sense to not add any balance to the amount you owe on the house but you could reduce your payment slightly by refinancing. Ask for a lender credit to cover your costs, it will mean a higher rate but lower loan amount and you will start saving money on the payment right away. You won't be able to do anything about the 2nd mortgage unless you have 10% equity in the property or more.

Mar 20th 2013
0
0

Phil - The HARP I'm looking a has me rolling about $3000 of closing costs back into the loan. It will take me 13 months to recover from it. I am substitute teaching right now and have not had work that is covering my bills for several years now. My savings has been supplimenting that income so I don't have money to come to the table with at closing. I also probably can't qualify for a traditional refi for this reason. Are there other options for me? Can a lender offerring me the HARP do what you said with the credit? Thank you!

Mar 20th 2013
0
0
Dave Metsker (DaveMetsker)
#37 ranked lender in Oregon - 2,317 contributions

Make very sure your new job is in place, then review the answers on this forum. Good luck.

Mar 20th 2013
0
0

Dave - ?? I do not have a job offer. I have been looking for 4 years. This economy is killing me. I'm considering refinancing now to help reduce my bills. I've been told the HARP rates are going up...so how can I wait? Then its a mute point.

Mar 20th 2013
0
0
Julie Arnold (jarnol_674_157)
#18 ranked lender in Tennessee - 16 contributions

If you want to talk to someone local - 615-425-2215.

Mar 20th 2013
0
0
Phil Dumouchel (PhilDu)
#32 ranked lender in South Carolina - 2,237 contributions

Any lender can do that for you, the trade off is a higher rate - probably 0.25 to 0.5% higher which will make your payment slightly higher but because you would be borrowing $3000 less the difference is minimal and you aren't increasing your balance. Is your substitute teaching a permanent position? If not, you may run into problems with the approval - generally that isnt' considered stable income unless you can show a 2 year history of receiving it and the average will be used.

Mar 20th 2013
0
0
Julie Arnold (jarnol_674_157)
#18 ranked lender in Tennessee - 16 contributions

If you want to talk to someone local 615-425-2215

Mar 20th 2013
0
0
Nancy J Releford (nancyreleford)
#5 ranked lender in Tennessee - 222 contributions

If you want to discuss further, give my office a call. I am in the Boro.615-867-3060Thanks

Mar 20th 2013
0
0
Steve Azarch (sazarch)
#19 ranked lender in Tennessee - 93 contributions

Hello I would like to discuss in more detail with you.I am in Murfreesboro which is close to you.Please call me at 335-7301ThanksSteve

Mar 20th 2013
0
0
Subscribe to our news feed.