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I enjoy listening to you on WMBI and appreciate your clear cut instruction.
I am married and 52 yrs old. I am currently between jobs. (I average $30M/yr) In 2002, we refinanced our 30 year mortgage to a 15 year at 6.25%. I make one additional mortgage payment each year. We currently owe $31M on the mortgage.
We also took out an installment loan through our local bank in Nov of ‘08 for $15M to be paid in 10 years at 6.99%
Would it be advantageous to refinance our mortgage once more at a lower rate and consolidate our installment loan with it? Would the term have to be for 15 years?
My husband is also 52 and earns approximately $50-55M per year. We have a small IRA and approximately $7M in our savings account. Would we even qualify for refinancing with my current employment status?
Thank you for your guidance.
aemcclane, Thank you for your comment! With your balance being so low on your mortgage, it may not be advantageous. Here is what I would suggest. If you can refinance the two loans together, reduce BOTH the rate and term of the two loans (For example, to a 5 year loan), it may make good sense as long as the payments do not increase. You may gain some tax benefits by doing so, also. The key is to be sure that your payments and terms are reducing and you are not paying more in fees in the first year than you save. As for qualifying, it will depend on whether your husband’s income alone is enough to cover the payments. You do not want a mortgage payment more than 20% of your gross income, if possible. Also, be sure you leave plenty of equity in the house for safety reasons.
Let me know if I can be of any more help.
Blessings!
Dale
My parents now need 24/7 care and we need to put them in a home. I am not sure what the best way would be would it be better to get a reverse mortgage on their home, or would it be better to sell it and use that money fo the nursing home. I am not sure what our best option would be. Can you please advise if there is anyother way to handle this. The homes cost them $5,000.00 per person per month.
Thank You!
Amanda
Amanda, I’m sorry to hear about your situation. Without knowing the whole situation and the legal ramifications, it’s tough tpo tell you the specific answer for your situation. So let me answer generally. A reverse mortgage allows the borrower to borrow up to the amount they qualify for and not have to pay back payments monthly, or get monthly payouts against their equity until used up. This may be a good alternative, provided they can qualify in their current situation. The downside is that they can only get access to a portion of the equity and will be charged interest on it. By selling, you could get access to all funds and immediately put it into an account that is interest bearing that can e setup for monthly withdrawals. The risk here is making sure the money is pout into a safe fund – which is hard to find today. I would think the latter would ultimately be the better in most cases like this, if selling is possible, but I would consult an expert financial planner for the ultimate answer. I hope this is helpful! Blessings, Dale
Karen,
I am sooooo sorry for just now responding. I just got this message due to a computer glitch. I believe in your case short sale is the best solution. In the interim, contact your lender or servicer to see if you can make partial payments to avoid foreclosure while you are working through this. Of course, that is providing they will agree to the short sale. I admire and appreciate your heart for not wanting to be delinquent, THAT SPEAKS WELL OF YOUR CHARACTER! Unfortunately, sometimes there is just nothing else you can do. Let me share a few sceiptures to hopefully provide some hope and encouragement:
Psalm 119:50: My comfort in my suffering is this: Your promise preserves my life.
Psalm 119:76: May your unfailing love be my comfort, according to your promise to your servant.
Psalm 94:18-20: When I said, “My foot is slipping,” your love, O LORD, supported me. When anxiety was great within me, your consolation brought joy to my soul.
Psalm 71:20-21: Though you have made me see troubles, many and bitter, you will restore my life again; from the depths of the earth you will again bring me up. You will increase my honor and comfort me once again. I will praise you with the harp for your faithfulness, O my God; I will sing praise to you with the lyre, O Holy One of Israel.
Blessings,
Dale
Dear Mary,
First, let me sincerely apologize for the delayed response – I just got your message due to a computer glitch. Unfortunately, you are in a tough position. If your name is the only one on the promissory note, then you are fully responsible unless they get a loan to pay you off. The sad news is that if you short sell, they can come after you for the deficiency. Every lender is different, so you will have to talk to them about the situation. Have you looked at the Home Affordable Modification Program – http://www.makinghomeaffordable.gov? This could at least reduce the payments while you are trying to sell and make the burden less. I would get as much from the people as you can, work with your lender and start getting a realtor involved. As for your credit, if you go delinquent or short sell, it will be affected negatively. It takes 7 to 10 years to clear this off your credit. I wish I had a better solution for you. Will be praying for your situation. Give this to God and ask for a miracle. Blessings to you, Dale