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Author Topic: Need HELOC in AZ, can anyone help  (Read 3224 times)

Offline bwitzed

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Need HELOC in AZ, can anyone help
« on: January 22, 2007, 03:08:43 pm »
I worked with my friend on his first luxury property and my first investment.  Now I know what to do but in the interim,  I am stuck with a 2 yr prepayment penalaty of 6 mo of $352K at 8.14% on the first and a 3 yr prepayment penalty of 6 mo interest of $$88K.  The total mortgage is $550K.  Prior year's appraisals listed the property worth between $685 to $710K.  We are sending out an appraisal this week.  The property needs minor repair and to be held for the 2 years so that the area it is in can catch up to the house.  Don Diamond will be building a resort nearby and mall of America owns land nearby.  We need as much money as possible out of the house to do the small fix ups on the house and liquid granite pool and to hold it.  :-\

My FICO mid-score is about 681 ;D.  The house is located between Tucson and Vail, AZ in Pima County on 3.5 acres of land.

We've owned the property since Sep 25th 2006 so normal financing has seasoning issues.

While I should have gotten a better deal altogether on the rates and prepay (should not have happened), I am stuck with it now.  Since I will hold on to the property for the 2 years prepay on the first and know that I am going to have to pay the 2nd, can anyone help me with a HELOC that doesn't have a prepay nor seasoning issues??  ???

I have already gotten an offer for refi at 7.9% for the first and 11.?% for the second on $685K.  Please do better than this.  ::)

Thanks.

Offline yrush2000

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Re:Need HELOC in AZ, can anyone help
« Reply #1 on: January 22, 2007, 07:27:43 pm »
Since you already made the rookie mistake of getting into a loan with a prepay, you now need to see what loan will cost you less overall in a 2 or 3yr period if thats your hold time.

You can do the prepay which can be hefty but have a solid rate in the 6's or low 7's. If going stated, you should be in the 9-mid 10s on the 2nd hopefully.

Now if your doing a HELOC, you going to be in the 9-11% but can get it Interest only. HELOC are best done thru major banks, not brokers since the cost is so low, brokers can not make money on them.  I recommend shopping around on the HELOC by calling or stopping by some local banks. Also  CitiBank does a No season refi. But check them all out ,Chase, Wachovia, Bank of America, Washington Mutual, etc.. plus the small banks..

Offline bwitzed

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Re:Need HELOC in AZ, can anyone help
« Reply #2 on: January 23, 2007, 01:19:40 pm »
The prepay came about in a sort of bait and switch manner.  I didn't find out about the prepay until the signing of the deal.  I have never done this before and wondered about it.  But since it was my friend who set up the deal and a friend of his who was the mortgage broker, and since we had discussed holding for 2-3 years, I just signed it.  Afterward, the broker -- new in the business but working for Home Loan Executives who is apparently known for these prepay tricks -- claimed he did not know about the prepay and that I could have just not signed and he would find something else.  Another broker says the situation should be reported.  Live and learn, I guess.

Thanks for the suggestions.  I've actually been through Wells Fargo who has a seasoning issue but did say that if I did a refi at 6.5% my payments would still be less and I would have more money so I can do some fix ups and holds.  (My friend here runs Tucsoninvestors.com and has a system to pay "cash gods" 10% per month.  I would store the money received in that and use the interest received to make the payments on the house.  I would like to get rid of the house soon, but it is currently overbuilt for the area so I have to hold it.)  

Do you think refi or HELOC is a better strategy (not that I've been offered any HELOCs)?  Or HELOC now and refi the whole thing at a lower rate later?  I also prefer to go no ratio or no doc as the only real income I have received is the $20K at the beginning of this deal.  I'm looking to do more deals as I don't want to go back to the measly jobs I had before, but that is where I am at.  Every time I do stated, I feel it is necessary to stretch the truth, which I prefer not to do.

I appreciate any advice.

thanks.

Offline bwitzed

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Re:Need HELOC in AZ, can anyone help
« Reply #3 on: January 24, 2007, 01:29:37 pm »
I'm trying to digest what you wrote.  Are you saying that even though I might hold the property for the length of the prepay, I might still be better eating the prepay now -- since it is 6 mo and not 2 years worth of interest -- and getting a lower rate?  I know if I wait for seasoning to knock off next month -- which means another $4400 in the hole, I can get this wonderful woman -- Jackie -- in Wells Fargo of Seattle (I'll provide number for anyone who wants) to get me a no ratio or no doc loan for the full appraised value (hopefully $685; purchase price was $550).  Or, I have been offered $7.9% on 80% of $685 now and 11.6% on the remaining if I do it now as  a complete refi.  Are you saying that I would be better to refi than to HELOC?  Could you please explain?

Thanks.

BMH

PS  What happened to the other reply from yesterday where the guy gave me his contact info?  I no longer see it posted.  (Thankfully, it got into my phone yesterday.

Offline kdhastedt

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Re:Need HELOC in AZ, can anyone help
« Reply #4 on: January 24, 2007, 01:31:45 pm »

In most likelihood, it was removed.  It is against Forum Rules to post your contact information in the body of your message.

Keith
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I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline bwitzed

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Re:Need HELOC in AZ, can anyone help
« Reply #5 on: January 24, 2007, 01:45:15 pm »
OH!  Glad I got it yesterday then.  If it is against  forum rules to do that, then how would someone go about doing it.

What if I wanted to share the contact info of a great lender?

Offline kdhastedt

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Re:Need HELOC in AZ, can anyone help
« Reply #6 on: January 24, 2007, 01:53:53 pm »
The lender's information is not YOUR information...the one that you are talking about said "contact me" (a Rules violation) and gave his information (a second violation)...

You can put your own information in the Member's Default Signature area (if you read the Forum Rules as required, this is covered and should come as no surprise)...

If you need to pass personal contact information to another user, you can e-mail them (their e-mail address may be visible in their profile) or you can send them a Private Message (PM)...

Keith

Keith
« Last Edit: January 24, 2007, 01:55:37 pm by kdhastedt »
I have CDO...it's like OCD but in alphabetical order - the way it should be!

Offline Mdhaas

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Re:Need HELOC in AZ, can anyone help
« Reply #7 on: January 24, 2007, 01:53:55 pm »
Quote
What if I wanted to share the contact info of a great lender?

You can post it here;  http://www.reiclub.com/local-service-providers.php
If at first you don't succeed.....................skydiving is not for you

Offline yrush2000

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Re:Need HELOC in AZ, can anyone help
« Reply #8 on: January 24, 2007, 06:49:17 pm »
Since Keith who has the ability to answer your question, I will..

Like I stated before you need to calculate your total cost of the loan. If doing a refi, make sure you add in your penalty. Sometimes you come out ahead paying the penalty because of the higher rate.  But also something not mentioned before. I gather you have a 2nd on the house already.  And since you have prepay on both (from what I am reading) and this seems odd to have it on the 2nd, look into refiancing the 2nd loan only and getting a cashout on the refi.  If you do not need to goto 100% CLTV on the loan, do that.   There is no rule the 2nd has to be 20% or less. Many people do what I think is called a fixed term refi on new purchases. This is where they want cashout, but do not change the loan amount on the 1st, they leave it the same, and get cash out on the 2nd.  

I would call around and ask about that and check with some comments on others in this site..

Offline kdhastedt

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Re:Need HELOC in AZ, can anyone help
« Reply #9 on: January 25, 2007, 09:47:20 am »
Since Keith who has the ability to answer your question, I will..

Huh...?

Keith
I have CDO...it's like OCD but in alphabetical order - the way it should be!

 




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