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Question for the Money Doctors

Question submitted on Aug 17, 2012.

Question

I have a 1st mortgage of $123K (5.5%), a heloc frm credit union w/balance of $75 (3.9%), credit card debt of $19K. I tried to refinance 1st mortgage but since my credit union has 2nd position, they won''t sign off on lower finance rate for firsts if ltv is lower than 80%. Got any ideas?

Answer

You did not provide the value of your home, but I assume your house appraises for less $247K? If you are willing to pay for Private Mortgage Insurance (PMI), you can get a loan for more than 80% of the value of your home. You''ll need to check on the cost of PMI and if it were available. Your home will need to appraise for at least $271K to be able to refinance this entire balance. This will also depend upon your monthly income and credit score.

Talk to your lender on how to improve the value of your home and how to improve your credit score. If you don''t have enough income, consider a second job.


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