Thursday, October 25, 2007

Refinaning My Rental property

Now that I was back in control of my day to day finances, it was time to correct this mortgage situation. My rental house was being rented out to a family that had a fire. I was being paid by the insurance company, and they were paying top dollar for temporary housing. The problem was that while I was taking in $2,800 i was still paying out $2,800 in mortgage, taxes, HELOC and Credit Card loans.

Because this was during the Housing Bubble, finding a refinancing mortgage proved to be very difficult. I had a bankruptcy, investment property, owned less than one year... Every odd was against me. What I ended up doing was finding a Mortgage Broker, who found a Mortgage Broker, who found a bank. Cost me a little more, but it got the job done that no one else seemed to be able to do.

What I did was skip two payments, and put that into the bank. Mostly, those two months paid for the refinance fees. I was also able to squeek another $1700 cash out at closing. this brought my Loan to Value at 80%. this made the bank happy, and me happy as well.

Skipping Two Payments: $3,400
APR went from 10.4% (at 95%ltv) to 7.8% (at 80%ltv)
Monthly Savings: $300

When all the dust had settled, I was left with the following:

Private Loan: $10,000
Private Loan: $4,500
Credit Card: $9,000

Savings: $5,300

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