lovely_kelly2004 asked:
So I am refinancing my home and taking out what will be my second home equity loan. I took out the first one about a year ago. I am taking another one because I would like to pay off my car loan and credit card debt and try to put a deck on my house. The problem is I want to have Countrywide pay off the second lender (Wayne Bank) and take that loan and wrap it up in this one and still get up to 95% of my homes equity which would be about $20,000. However Countrywide wants me to take the $20,000 and payoff Wayne bank which is $9600 and then use what ever is left over for whatever I want. My car loan right now is $14,500, credit cards are $2500 and the balance I want to go building a deck. So my question is why won’t Counrtywide just take the loan so I can pay everything else off. It’s financially better for us to keep both home equity loans and pay everything else off. I would be pretty much breaking even if I pay Wayne bank back?? Help me with this mess please!!
Karl
So I am refinancing my home and taking out what will be my second home equity loan. I took out the first one about a year ago. I am taking another one because I would like to pay off my car loan and credit card debt and try to put a deck on my house. The problem is I want to have Countrywide pay off the second lender (Wayne Bank) and take that loan and wrap it up in this one and still get up to 95% of my homes equity which would be about $20,000. However Countrywide wants me to take the $20,000 and payoff Wayne bank which is $9600 and then use what ever is left over for whatever I want. My car loan right now is $14,500, credit cards are $2500 and the balance I want to go building a deck. So my question is why won’t Counrtywide just take the loan so I can pay everything else off. It’s financially better for us to keep both home equity loans and pay everything else off. I would be pretty much breaking even if I pay Wayne bank back?? Help me with this mess please!!
Karl
Mary
Here is what you should do. Save your money and pay for things with cash, all this debt that you are in is only going to cost you more (in interest).
Comment by Emily — September 23, 2009 @ 1:03 pm
Lewis
Have you been on another planet for the last six months?
Home values are plummeting across the country, if you borrow 95% of the homes value, by next week it could be 110. That’s not a position that the bank is interested in, should you go into foreclosure, they would take a loss when the house is sold. Sit tight, things will get better, do your refi when the market starts an upswing.
Comment by Tom S — September 25, 2009 @ 10:06 am
Randy
1st) This doesn’t make sense. Your math says you want 20,000 to pay off your current 2nd mortgage, car and credit cards. Then it says Countrywide is doing exactly that. You need to clarify that.
2nd) You will have to pay off your current 2nd mtg, they will not do a 3rd position home eq loan.
3rd) Why do people think its a good idea to pay off their car with their mortgage? You are stretching the financing out 15-30 years. You are using all your equity for a car that you will probably trade in 2 years anyways. Not a good idea.
Comment by Jennifer F — September 27, 2009 @ 2:46 am
Rodney
It is not normal for one home equity loan to pay off another, as in a refinance. It would be your job to take the proceeds of the second loan, and pay off the first.
That said, it sounds like your debt right now among the things you want to pay off is $9600 + $14,500 + $2500 = $26,600. If your equity in your home only allows you to borrow $20,000 , you can see why Countrywide would not want to lend you more. That’s how institutions got into subprime trouble in the first place, extending too much credit.
It sounds like you’re on the road to possible debt problems, though you’re not there, yet. It would be worth talking to a credit counselor, just to get an understanding of how these things work, not that you need any particular plan right now. If it were me, I would never build a deck with so little equity in my home, and [I'm guessing here] very little savings. I would take the $20,000 loan, pay off the other loans with highest interest (probably the credit card and car, or credit card and first home equity), then put whatever was left over toward paying off some of the remaining debt.
Comment by roderick_young — September 29, 2009 @ 4:12 am
Billy
It may be better for you, but is it better for the bank? The banking rules have gotten much tighter with our finanical market hurting. These rules have come down from the fed’s.
You have a first and youwant a second, to pay off your car and credit cards. The idea of getting a loan (first or second loan) is too pay off as much as you can inclding your first.
As well as you high interest credit cards/other loans.
Do you know you credit score? are you married? Do you know your credit to income ratio? Some baks will not work with you if it’s less then 40 to 45%.
We some times make loans but like a bank we need to know some of these same questions.
If your able to pay more on your first loan you should do it, This will help to bring donw your princiable faster and also giving you more equity faster on your home.
With other cards /car loan or other small loans pay off the small ones first and stay fouces to get out of debt.
you can e-mail us if you need more help
Comment by Michael S — September 29, 2009 @ 6:26 pm