Hello, I have a client who is in fast need of refinancing advice.
He loves this home and has no desire to sell soon, he has built his paradise back yard with pool, outdoor kitchen, etc... The reason why he needs to refinance ASAP, is because his 10 year equity line at prime / adjustable through Citibank, has recently hit the point where he is no longer paying interest only every month, but is now having to pay principle + interest and his payment has therefore tripled, which he cannot afford. He is still paying the interest only amount and is about to have this hit his credit next month and does not want to ruin his credit.
He has applied for a combined refinance with his bank and his credit union, both denied him. He is currently running it through a mortgage broker friend of his (UPDATE: this friend is not with a mortgage broker company, according to their website, they are a direct lender - "an independent and well-capitalized direct lender and mortgage banker") and will know soon if that will work. What other options are available to him? I know there are so many out there in this situation about now, so I thought this might make a good "public interest" - what should people do post - where all of you finance experts can show your knowledge. Please feel free to comment below and ask questions for needed information to provide advice. FYI - this particular client is in San Diego County, CA.
Here are the important details that I thought to ask him:
- Amount owed on first mortgage / which company: $303,000 - Bayview Mortgage.
- Current payment on first: $2241/ month
- Interest rate on first: 5.8%
- Amount owed on 10 year equity line: $180,000 - Citibank
- Payment on 2nd: $525.00 / was interest only
- Current payment after 10 year interest only rate expired: $1425.00 / month
- Interest rate on equity line: prime - adjustable
- Amount of rent from Tenant: $1300.00 / month (apartment over garage)
- Expiration date of lease from Tenant: month to month now
- Proven rental income for how many years now on unit: 1
- Approximate value of home: client thinks $625,000 based on comps, data on zestimate doesn't show converted square footage as being part of the home even though it was grandfathered in by the city - current Zillow Zestimate of home is: $483,063
- Your current base gross income:$7000 per month but that can be higher with overtime etc..
- Any other income: just the rental income from the apartment
- Your middle FICO credit score: 690
- Major items showing on your credit report as owing are: Visa $9000.00 everything else is paid off,
- Important details I might have forgotten to ask you: I have a mortgage through Marriott for 14,000.00 for my time share ($240/ month)
The main stats of the house as Zillow lists it now is: (does not show original garage converted to family room or new building of 2 car garage with apartment overhead)