Refinance questions

[Bill/misty]

Hello,


I have some questions regarding refinancing and would welcome some input.

My wife and I are looking to refinance our home and pull out some cash. (I
estimate we have Aprx. $300,000 equity)

We own 3.3 acres in QueenCreek Arizona, with an affixed 1985 single wide
mobile home with a 20x20 built-on bedroom.

Due to medical problems over the last several years we have some pretty bad credit, (no liens or judgments) our credit score is around 530.

We owe Aprx. $80,000 on our home, we have a first mortgage with a payoff of $45,000 and a second with Aprx. $35,000(a private investor at a good rate).

A comparable property on our street (bare land no house or trailer) sold
Aprx. 6 months ago for $350,000. Several comparable pieces of property (bare land) in our neighborhood are on the market now listed in the high $300's to mid $400's (a property down our street is listed for $389,000 and another for $440,000. All 3 listed on MLS).

I assume our trailer has no real value and may even be a detriment.

Some of the properties sold in the last year or so now have large custom
homes on them and several are being built, the area is quickly morphing from
Hillbilly to Highbrow :-)

We are considering selling the place, but I feel with so many in our area
currently on the market, now would be a bad time. So we have decided to wait a year or two and take some equity out now.

We were wondering if it is possible to refinance our 1st mrtg. and leave our
second intact since that rate is fairly low?

Overall we are looking to refinance with a short term (12 to 24 mo.)
interest only loan of around $60,000 over the existing balance. This would be a loan of around $140,000 to $150,000 total, less than 50 % LTV.

We would even be willing to prepay a portion of the payments, and guarantee at least 6 mo. interest payments even if we sold the place.

We would like to get an interest rate that did not exceed 12% and we will
not pay any fees up front.

I was also wondering exactly how an appraisal works on bare land. Other than making sure it's not in a flood plane, swamp land, or on the side of a cliff what is involved in a land appraisal besides recent comparable sales?

Some one told me bare land appraisals where harder to do than homes and much more expensive?

I was considering getting an independant appraisal done.

Also we are considering moving into town and renting the place out for the
next year or so until we are ready to sell. If we did that would that make it
Non-owner ocuoied?

We have spoken to our Bank and they suggest seeking out a hard money lender, I would be interested in knowing if any one here has any suggestions, advice or perhaps a referral.


Please feel free to e-mail us any comments, questions or suggestions.

Bill and Misty Hartwell
QueenCreek Arizona.
mistyhartwell@peoplepc.com

Thank you.

[Greg]

We were wondering if it is possible to refinance our 1st mrtg. and leave our second intact since that rate is fairly low?

This is possible as long as the private mortgage holder will subordinate their lein to your new mortgage company.

In simple terms a first mortgage is the first person to get paid in the event of a loss, foreclosure and so on. Then the second. If you do a new mortgage paying off the first then the second would then become your first mortgage unless the private mortgage subordinates to the new first. So yes and by doing this you have more options and better interest rates.

The raw land financing is not typically something that even a perfect borrower can do unless it is to purchase the land with intent to build. Some smaller lenders/banks will secure raw land though. Not for a 530 score though. I am not real good with the hard money loans. I beleive this requires a home on the land and you have one but not sure how it being a mobile will effect things. Hard Money loans are designed to use the property as security rather than evaluating the borrowers income and credit as heavily as traditional loans. Some do not even care about your income or credit. It is very rare to have a lender take a single wide as security. There are lenders who do it but to better credit borrowers.

Then moving out... That will hurt your chances at getting the best rate available.

12% is too high. You should not even come close to exceeding 10%. Despite your credit score 50% LTV is a very low risk. As long as you are under 65% you should get no worse than 9%.