So I am with most on the thoughts about unnecessary debt and being debt free.

Having said that a real estate opportunity has presented itself. In a relatively short period of time it would be of a significant benefit financially.

To make it happen I would need to take equity from our residence. Of which we have better than 75 % equity in and a short 5 year {approx} term remaining.

I would need to borrow about another 40% of the remaining equity. I would do it on a 20 year note with a commitment to myself to pay it off in 10 year's or less.

So I am looking for advice and thoughts on the topic. Not about doing it. More about the refinance or other options if any.

If we have any refianace folks please chime in or feel free to contact via my profile.

Have excellent credit. Looking for a quality company with minimal fee's.
Good rates. No hidden fees and no BS. Just a good straight forward, above board deal.


Thanks.

It is never wise to take equity out of your home for a business venture. Or real estate speculation or etc.

If you were so inclined to do so, I'd look into a second mortgage if you can get enough out that way.

quote:

I'd look into a second mortgage if you can get enough out that way.

Check into changes in deductibility of second mortgage. I understand HELOC's are no longer deductible.

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It is never wise to take equity out of your home for a business venture. Or real estate speculation or etc.

If you were so inclined to do so, I'd look into a second mortgage if you can get enough out that way.

This makes no sense to me. But I am sure you have your reasons Jimmy. I will pass though. Thx

quote:

Originally posted by jimmy123x:
It is never wise to take equity out of your home for a business venture. Or real estate speculation or etc.

If you were so inclined to do so, I'd look into a second mortgage if you can get enough out that way.

How is taking money out of a primary residence in a second mortgage different than taking money out of a primary residence in a cash out refi? In either case you have increased the debt on the house. You are likely to pay a higher rate of interest on money borrowed against a second. I’d love to hear why a second would be advantageous to the borrower.

I was in the mortgage business for 13 years before I became a LEO. Each State is going to have some different laws and Texas where I'm at is one of the more conservative States as far as pulling equity out of your house.

With rates on firsts being so low, your rate and payment is going to be lower if you combine it all in one payment.

If you keep your first and just add the second your rate will be higher on the second but your costs as far as getting the mortgage (fees) should be significantly less than if you refinance it all under one new first. Just adding a second lien may also be a lot easier as far as getting the loan, ie a much smaller headache.

You definitely need to talk to a good mortgage guy in your area just to go over all your options.

I know it means passing on what might potentially be significant profit but I never gamble using where I lay my head at night as collateral, but that’s just me although my win/loss ratio says I did OK. Some did much better but more didn’t.

Real Estate is a cyclical series of bubbles where some profit and some get hurt and it’s all timing so ask yourself in your best Clint Eastwood voice if you feel lucky.

Best advice is trust your instincts but be aware of your risk tolerance.

quote:

Originally posted by slosig:

quote:

Originally posted by jimmy123x:
It is never wise to take equity out of your home for a business venture. Or real estate speculation or etc.

If you were so inclined to do so, I'd look into a second mortgage if you can get enough out that way.

How is taking money out of a primary residence in a second mortgage different than taking money out of a primary residence in a cash out refi? In either case you have increased the debt on the house. You are likely to pay a higher rate of interest on money borrowed against a second. I’d love to hear why a second would be advantageous to the borrower.

Because what's left on the first mortgage is so short (5 years left) that his entire payment on that one is 99%+ principle, the interest was all paid long ago. So if you refinance this entire amount of the first AND what you're taking out for this other real estate. You're restarting the entire interest cycle on what is currently owed on the first mortgage and he's looking for a short term loan (10 years). So basically you'd be paying a TON of interest on the 25% owed on the house that's been already paid, as the VAST majority of a mortgages interest is paid in the first 10 years.

My other statement was, I would never take money out of my home for a business venture or real estate venture, because that's telling me you then don't have enough to fund the what if's. Especially if the house is almost paid off.

then IF you must do so. (Meaning I wouldn't, but most people are going to do what theyre going to do).

With the new standard deduction doubling, he may not be using mortgage interest as a deduction.

220-9er can you elaborate on that.

And yes Jimmy, that does makes some sense. But by doing what I am considering. I would move back my first from 5 to 20 years. Lower our monthly payment some. So I would take the difference each month and pay the principal down. There is also another factor that will also pay down the principal in the near future.
Plus we would own outright another valuable RE asset.

There are several factors at play here.

Timing is everything.

The conference room table in my office was stained with the tears of quite a few folks who risked, and lost, losing their homes in an effort to “get rich” with aggressive financing moves.

Not all were mere home owners. Some carried debt on their homes so they could have an ante into the real estate game, but when the music stopped, there weren't enough chairs.

quote:

If we have any refianace folks please chime in or feel free to contact via my profile.

Have excellent credit. Looking for a quality company with minimal fee's.
Good rates. No hidden fees and no BS. Just a good straight forward, above board deal.

I would look at a 15 year rather than a 20 year. There's often a difference in rates.

Where are you located?
I have a guy I know and trust who has done many mortgages for me... but it's a local business. Licensed in Missouri.

quote:

Originally posted by 220-9er:
With the new standard deduction doubling, he may not be using mortgage interest as a deduction.

His state may have something that changes that. You and me may as we are in Ga, but his could be different. I was a business major, so not a refi guy, but I do understand that taking any loan on something already out of interest is like maxing out a credit card when you could pay cash, then paying it off by a percent instead of at once. IE you are spending more than it would be worth. However, if you have a gurantee on the short time, im talking 6 months, it could be worth it. But if the turnaround is 6 months plus, I would not take out equity.

I've had good service with Greenlight. Just ask for a straight interest, no appraisal fee, no origination fee. Refinance with cash back.

I called and the paperwork was all by FedEx. It might be over the internet now with DocuSign.

And I know what you mean about no hidden BS. When I called the first time, I think I spent about half the time asking the same question in different ways: "You sure there are no fees at all? You're just going to charge me the APR you are quoting?"

I'm just answering the question of how. I figured you've already answered the why or why not.

quote:

Originally posted by old rugged cross:
220-9er can you elaborate on that.

And yes Jimmy, that does makes some sense. But by doing what I am considering. I would move back my first from 5 to 20 years. Lower our monthly payment some. So I would take the difference each month and pay the principal down. There is also another factor that will also pay down the principal in the near future.
Plus we would own outright another valuable RE asset.

There are several factors at play here.

Or if you take a second, in 5 years your first
will be paid off completely and you can then take that entire monthly payment and apply it to the 2nd mortgage. Look at your current mortgage payment how much is interest and how much is principle?