I want to refinance my home and combine my mortgage and equity line. ?
Dec 08
Student Loans Q&A credit card balance, credit score, debt to income ratio, debts, equity line, line 1, score increase, student loan 5 Comments
My credit score is 680. I was told my debt to income ratio is high. Will my credit score increase and will it be better for me if I pay off these debts showing on my account by using my equity line?
1. credit card balance
2. a student loan I co-signed with my son (my son pays the monthly bill)
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Dec 08, 2009 @ 11:53:09
I dont see why you would have to pay off the student loan as long as your son can show cancelled checks. That will not be hit against your DTI ratio. Your credit card pay off will raise your score. And maybe you can qualify for a better rate maybe not. Talk to your loan officer or contact another loan officer to see if you can get a better rate to qualify. But you will have to pay off the credfit card.
Dec 08, 2009 @ 11:53:09
Pay off the HELOC and have that amount available for another time. You won’t have to pay closing costs on it.
Dec 08, 2009 @ 11:53:09
Credit card balance is the worst. Pay that off first. Your ability to refi will depend, in part, on your loan-to-market value ratio (how much equity you have in the house).
Dec 08, 2009 @ 11:53:09
A refinance is costly and, if you’re trying to also refinance other debts like your equity line, many people’s homes don’t have enough value to get the loan. Lenders will normally only lend 80% of your home’s current value. For many home owners, their first mortgage alone exceeds that amount because homes have dropped in value.
Your credit card undoubtedly has a higher interest rate so that’s a real good place to concentrate your effort. Get that paid off and you’ll be in much better shape.
Dec 08, 2009 @ 11:53:09
Another option might be to roll the credit card debt into the new loan. As the new loan is funded the company refinancing the loan(s) pays off the credit card debt which will lower the debt to income ratio. Talk with an experienced and reputable loan officer.