Consolidate Loans?
I hope someone here can guide me to the right choices. I have 4 properties. Primary home, vacation home, rental house, Large duplex. Primary has 38k mortgage and 21k home equity fixed rate loan, house worth approx. 235k. Vacation home has 70k home equity var rate. do not rent it out, home worth approx. 200k. Rental house 86k home equity var rate intrest only loan. Just starting to rent at $1,100.00 mnth. House worth 115k. Large duplex owned free and clear. Rental income $1,850 mnth. Worth $190k. This is in an LLC.
I would like to get everything off primary due to recently being put on FEMA flood plan Adding $1,500 a year for ins. prem. I would like to get rid of all home equity loans even though rates are good now--3.25 and 4%. I will have owned the duplex for 2yrs on 1-15-11. The house owned for 4yrs.
What would the best approach be---contact existing banks--look for other banks--local etc...I have 80k left open on vacation HE-line.
Thanks for any help
My focus is always on getting to free and clear, so would take the ~ $3k/mo in rental income and pay off primary house in ~ 20 months.
ddstew,
Thanks for your reply. It would take much longer than 20 months. Some of this rental income money goes towards home equity loans etc....also.
to segragate risk. If I understood, have your residence and vaca home paid in full and debt on the properties in the LLC, unless there is a PG.
Newkid, Thanks for reply.
I have a home equity line on the vacation home of 150k. I have 70k of that used. I was going to take another 59k of that to pay primary off. I felt that the newly forced addition of flood ins--1,500 yr took away any advantage in keeping the mortgage on primary. If I pay off primary then I dont have to pay flood ins. as bank is making me get it. What do you think of doing this? Then I would have primary free and clear and save that $1,500 I could even use that to then pay down vacation home equity???what do you think?
Duplex is in LLC and is free and clear. The other home has the intrest only Home equity at 86k. Are you saying to keep this var. rate HE loan and just add extra for principle pay down as opposed to re-fin it? What about some type of cash out loan on the duplex to pay the intrest only off???
Thanks for you 2cents
A broker is offering me this:
I would only use the Wildwood Vacation property and the End of Row rental because it is the path of least resistance. Changing the duplex over from the LLC may have ramifications we are not aware of. The loan for Wildwood would cover the costs to refinance both houses, so there is minimal money out of pocket. Both loans you pay the taxes and insurances like you are now. The loan on Wildwood would be around $140,000 or more and the end of row would be $80,000.00. Why $80,000 from $86,000 because of the value. The rate for Wildwood would 4.50% and the end of row would be 5% and both loans have a 1 point charge. Now both loans are fixed for 30 years and you have the ability to pay them off whenever you want to as there is no penalty to prepay. These rates apply as long as your credit scores are higher than 720.
the payments are as follows: Wildwood $710.00 and Eddystone $430.00. Naturally depends on the exact terms. We would appraise both properties and to get started we would have to do the application on the phone. Time frame would be to be done by the end of the year. Is it tough is a good question. If the information we ask for is supplied immediately and the numbers work, no it is not tough. We do not use a bank we sell to FNMA, the largest mortgage banker in the country. Fees and costs would be disclosed at application but here is a rough estimate:
1. Appraisal and application fees for each: just under $1,000.00. May be slightly more Pa because investment appraisal type.
2. Title costs: Wildwood $1,600 Pa $1,200. Includes the recording charges.
The above costs do not include adjustments for insurances and taxes even though they are not being escrowed. These costs as I mentioned can be incorporated in the loan amount for Wildwood. The only cost we take upfront is the appraisal fees for each property. Call me when you get this on my cell so we may proceed. Thank you.
???
A new loan that pays off two or more existing loans or indebtednesses, usually resulting in lower payments.Home equity lines of credit are often marketed as consolidation loans, urging consumers to pay off high-interest-rate credit cards and automotive debt for lower-interest-rate, tax-deductible, mortgage debt.While the practice does reduce monthly payments significantly, it replaces relatively short term debt with long-term debt and results in higher total interest payments over time.