Mortgage and debt question

[Trey]

If we get into a house and the fair market value is say 350, and our mortgage is for 300K (meaning we have roughly 50K of equity in the home), can we turn around and get it appraised through the bank and roll the remainder of our debt into our mortgage? How much "equity" do you need to keep in a home, is it like 20% or something? This is all new to me, so any help would be appreciated!

TIA!

[Bex]

Originally Posted by Rileysmom If we get into a house and the fair market value is say 350, and our mortgage is for 300K (meaning we have roughly 50K of equity in the home), can we turn around and get it appraised through the bank and roll the remainder of our debt into our mortgage? How much "equity" do you need to keep in a home, is it like 20% or something? This is all new to me, so any help would be appreciated! TIA!

you could but generally refinance rates are higher than purchase rates. also above 80 percent you would have mortgage insurance. id recommend doing an equity line or fixed second. also you would have to get your house reappraised and oftentimes the new appraisal comes up close to the purchase price...from what ive seen...in this soft market.

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[Bex]

ohhhh one other thing to keep in mind...depending on the lender, if u refinance within 6 or possibly 12 months of purchase, u have to use the purchase price instead of appraised value. we wanted to do the same thing when we bought our home but current market conditions make it impossible for us

[princessbunny197]

It is possible but with most lenders they are leery to do that and they have what they call "seasoning" rules, that means you need to own the house for a certain amount of time in order to use the true value of the house versus what you bought it for. I'm a mortgage broker and if you need any help at all please feel free to PM me and I'll gladly answer questions you have. I've been in the business for 11 years and know the industry inside and out

[Bex]

Originally Posted by princessbunny197 It is possible but with most lenders they are leery to do that and they have what they call "seasoning" rules, that means you need to own the house for a certain amount of time in order to use the true value of the house versus what you bought it for. I'm a mortgage broker and if you need any help at all please feel free to PM me and I'll gladly answer questions you have. I've been in the business for 11 years and know the industry inside and out

That's what I was attempting to say in my post above.

[Trey]

Originally Posted by Bex ohhhh one other thing to keep in mind...depending on the lender, if u refinance within 6 or possibly 12 months of purchase, u have to use the purchase price instead of appraised value. we wanted to do the same thing when we bought our home but current market conditions make it impossible for us

That's what I was wondering... that added in with the fact that homes prices could still be falling...

[Hisgirl]

Honestly, I'd avoid any HEL or HELOC right now. Not only are they harder to get, but it's risky, you're setting yourself up to be potentially upside down on your mortgage. You definately don't want that!

Often HEL and HELOC have adjustable rates, which is part of the reason our economy is in shambles right now...many people have adjustable mortgages that have adjusted and they can't afford their payment anymore AND they can't sell because they owe more than it's worth. It's an ugly place to be, that's why you see so many foreclosures.

Are you putting money down on the house? How are you paying under fair market value? Market value is what the sells for, right? So in this case, $300K.