First Time Home Buyer Program Disqualifications
Community – I’ve got a question. My girlfriend’s mother owns a home in Brooklyn. She has like 7 years left on the mortgage (@7.5%). She wants to refinance (15 year mortgage) the house and take some cash out. According to the bank, her mother does not have high enough income to refinance. If my girlfriend…
Community – I’ve got a question. My girlfriend’s mother owns a home in Brooklyn. She has like 7 years left on the mortgage (@7.5%). She wants to refinance (15 year mortgage) the house and take some cash out. According to the bank, her mother does not have high enough income to refinance.
If my girlfriend is put on the title of the house, and refinances it with her, will any “first time home buyer” benefits/program be unavailable to us whenever we decide to purchase our own home?
Anyone suggest pros/cons of her becoming part owner of the house?
Side notes: It is a 2 family house. Rental income is 1300/month. I am not 100% sure on the mortgage balance, but its definitely under 100k. The house is “worth” around 650-700k, according to trulia, zillow, etc.
Thanks in advance.
Agree with many comments here. Why refi a mortgage for such a small amount? Rates are very low for home equity loans.
Would recommend a FIXED rate home equity loan — perhaps from a credit union. Can do a 15 year loan, and generally after a few years, there is no prepayment penalty if you want to get rid of it. And sometimes credit unions pay some of the closing costs–which are not that high, anyway.
Do NOT go for the variable rate HELOC (home equity line of credit)…these do not have STABLE rates and may be dangerous over time.
Overall the home equity seems like the simplest thing and keeps your GF out of it.
Agree with Curiosity.
Many organizations will give a low-cost loan for that amount for home repairs. Contact a bank, take out a HELOC, Neighborhood Housing Service (NHS) of Flatbush, your local community credit union, and so on. It’s not worth it to refinance.
NHS of Flatbush in particular and other neighborhood organizations like it offer very low cost loans for home repair of all kinds.
Good luck.
Closing costs alone will be quite expensive. If the goal really is just for the $25,000 in cash, surely there are other options than going for a full refinance and getting family finances all complicated.
Good luck!
her mother wants to cash to make more upgrades to the house. the mortgage is actually 90k. and the rent of the new tenant is actually 1400.
her mother is in her 50s.
@serpenter – its not like shes taking out hundreds of thousands. she wants approx 25k. the ltv is still pretty low. i think the house is actually worth a lot more as they have made many of upgrades over the years that those online sites dont know about.
my biggest concern was when its our turn to buy a house….
Didn’t see that, Bklinite. I guess the question is how old is the mom, how far from retirement, how secure her job, etc.? She’ll end up paying a lot more in interest over the life of the loan than she would if she did not refinance. I don’t know how much, but tens of thousands.
How badly does she need this cash infusion and why?
A house is not an ATM machine — unless you plan to lose the house and end up homeless.
I know from my own experience that the bank will issue the deed with one name, while the loan has the primary purchaser and the co-signer (my income also wasn’t high enough). Is this different from the scenario above?
mopar,
OP said 15 years, not 30.
Look at my example – she can refi, take 65k cash (maybe she wants to buy a car or renovate a kitchen), lower monthly payments by 200, and already have most of the housing expenses paid for because the rent covers more than the payment and still be mortgage free in 15 years. Stretching out the term by 8 years is not that crazy.
Whether the bank will write a loan in 2 names with a deed in one is a question for the lender; how recording a deed and taking a loan in both names impacts taxes and future transactions for GF may be a question for an attorney.
Bklnite, she’ll be switching from a seven year mortgage to a 30-year-mortgage with all the interest and costs that entails. Crazy.
Doesn’t she want to live mortgage free in her retirement years?
If your mom needs cash, have your girlfriend give it to her.