Getting the Equity Out of Your Home

My husband and I are @ 85% on our home so we were told we would not be able to do a cash out refinance (to get some liquid assests we need). Is there any other alternatives to getting access to some of our home equity without selling our home?

3 Answers

This question you ask cannot be answered without knowing what I like to call "The Pieces of the Puzzle". I have personally in the past 60 days qualified a client for 95 % cash out refinance.

Would that make sense for you? I don't know. Factors involved in getting an approval for this high of a loan to value would be based on several things, the area you live in, time in your home, time on your job, mortgage payment history, what the cash out would be used for, and is there a true benefit for you in the new loan.

Work with an experienced mortgage professional who understands this market and will ask the right questions. Far too many times today I see key things over looked in an application that could make the difference in how an underwriter looks at a file.

That's a great question, one that's asked often at my mortgage planning firm. From your question I'm going to assume that you live in Texas. Texas is a state which is not very home equity friendly. Unfortunately, your equity is tied up in your home until you sell and are able to reap the rewards of appreciation. Something you may want to think about is switching to an interest only note which would lower your monthly payments and give you more excessible cash in your pocket. Also, if you are looking to do home improvements with the equity you can still do a Home Improvement loan even at 100%.

The single best shot you have is an FHA insured mortgage. With an FHA mortgage, you can go to 95% on a cash out refinance. Of course, you need to meet the many requirements for an FHA approval.

Fha loans are available through many institutions. You will need to be below the mortgage amount limit for the area in which your home is located. These loans are full income check only. You must occupy the property as your primary residence. It must be a single family or 2 unit residence. You must have owned the property for a minimum of 12 months. FHA loans do mnot have an actual credit score limitation and your credit certainly doesn't need to be perfect but it can't be in terrible shape either.