I want to refinance my house. Should I add my student loans to it?

Question

I want to refi my house that we bought at $184,000 at 7.875%
it was fixed for 2 years and now will go up to 10.875%

Now, I have a $15,000 second mortgage that I accumulated from not having a job and misc expenses.
I want to combine them together.
I also want to add my $28,000 federal student loan at 6%
and my other private school loan of $12,000 at 13.25%
to the refi. I also have a credit card of $4,000 @ 8.99% fixed that I wouldn't mind adding to the refi as well.

First of all, Is this possible if my home is only appraised at $209,000 right now? And second, should I add these all together?

I would love to have one bill. All these payments are killing me.
Need your advice...
And if I should refi them all together, what companies have you been successful with for loans?

Answer 1

Well, here are my 2 cents. I do agree with pretty much all the other people who answered your question.

First of all, you need to find out for sure the value of your home, from 184,000.00 to 209,000.00 in two years seems a lot to me, unless you put a nice down payment when you bought it.

So, find out from a reliable source the true value of your property, and if you can refinace avoid going a 100% if at all possible.

right now the interest rates are still low, so it may be a good Idea for you to refinace into a fixed rate and combine your first and second mortgages. I would not recommend touching your student loans and small balances on your credit card.

Remember lenders are more cautious and guidelines are tighter, so make sure all the information the broker or bank is getting from you is accurate and true.

Go to your bank and broker, and then go to another bank and another broker. Don't let everybody check your credit, when they check your credit ask them to give you your scores, that way you will know what you are dealing with. Do not pay any money in advance. If someone asks you for money in advance, simply decline. Keep asking questions, there are still good people out there that truly care about homeowners.

Good luck!

Answer 2

You cannot borrow your way out of debt. It doesn't work no matter how hard you try.

Now with that said, It's doubtful you'll find anyone willing to lend you more than the house is worth. You should get rid of your current mortgage if you can, solely because it's an adjustable. You should get a fixed-rate mortgage. If you can get a 15-year, do it. If you can't, go for the 30-year.

If someone tries to sell you another adjustable loan, ask yourself the following question: if mortgage rates are about as low as they've been in the last 40 years, what direction are they more likely to adjust to, up or down? The answer is up. That's why adjustables are a bad idea.

You should pay off your debts, but borrowing money to do it is the wrong way to go. You'll get 1 big loan instead of 5 smaller ones.

Edit:
If you can't get a rate lower than 8% on the refi, you should probably just go ahead and sell. When a lender doesn't want to lend you money or only agrees to terms that are unfavorable to you, they're trying to tell you something. Namely, that you're a risky investment. They have much more experience in detrmining who is and isn't a risky investment than you do.

Good luck.

Answer 3

It doesn't make sense to add your lower interest loans into your mortgage, especially a federal student loan which often can be reduced to a lower rate anyway (if you haven't checked into this yet, I suggest you call your loan company or check their website to see if it's an option for you). Adding the higher-interest private school loan would be a good option since it would lower both your interest and your payments. As far as the credit card, unless you're going to close the account, I wouldn't suggest it. Too many people "pay off" their credit cards with a refinance, just to turn around and run up the balance again.

Make a list or spreadsheet showing all your current loans/credit accounts and their minimum payments, then use a loan calculator (most real estate or loan company's websites have them, as does Yahoo Finance) to see what your new loan payment would be with and without adding your other accounts.

As far as lenders, you first want to know what your credit score is. It's a terrible feeling to have a good credit score and get what you think is a good loan, then find out that your lender specializes in "bad credit" loans. Personally, I've had good experience with both Wells Fargo and their "bad credit" division, Wells Fargo Financial.

Again, Yahoo Finance has some great info on mortgages and refinancing.

Answer 4

Bad idea to roll all those student loans and credit card debt into your mortgage.

First, your house probably won't appaise enough to cover all that debt. Second, your new mortgage rate is going to be higher than the 6% on those Federal student loans.

Rolling your first and second mortgage into one and hopefully at a better rate than that 10.78% is a good idea. But the rest of the debt should not be included.

You should set up a strict budget. Eliminate all the extras -- cell phone, eating out, new clothes, etc. Put every penny you can squeeze out of that budget on the credit card, while making minimum payments on the rest of your debt. Once the credit card is paid off, move on to those 13.25% loans, then the Federal student loans.

Normally, I would say start with the highest interest rate but that 8.99% credit card sounds like a Capitol One and that rate is about to go up to 15% or 16%.

Within 2 years you should have the credit card and the private school loan paid off. Just don't run up anymore credit card debt. Only charge what you can pay in full at the end of the month.

Answer 5

All of your possibilities will be tied to the appraised value of your home and your credit score. Without knowing your credit score, I would certainly hope you can beat the 10.875% that's being quoted. You might start the process of determining the current value of yor home by getting comparable sales in your area.

I doubt you'll beat the 6% federal student loan, so I'd focus on the other laons IF your appraisal will suppoort the the addition of the other loans.

You definitely need to start managing your spending and debt.

Answer 6

you do have a problem -- your have a house that is worth 209k and your want to get a loan of about 240k -- so something will have drop off lets put the 28K a side it has a low interest rate. on face valve i would only combine the 1st and 2nd mortages. i would not charge anything else unless you can pay it off in 30 days -- then i woud really start to downsize my life style -- get rid of all cells phones and any other extras until i paid the 12k student loan -- than if i was not in chapter 7 or 13 i would allow self a good meal and start working toward the remaining balance of any cc debt== than all you should have is one student loan and one house payment.!!!

Answer 7

Call a mortgage broker. There are way too many missing variables for anyone to answer (e.g., your FICO score(s)), but I would guess you're going to have a tough time in the current credit environment. Not sure why you would want to add the 6% student loan in, since that is likely tax deductible for you anyway, and your mortgage rate I would again guess is going to be over 6%.

Answer 8

Well, I wouldn't refi a student loan that was at 6% that would not be smart

I also wouldn't add in a $4,000 credit card that was at 8.99%

both of those are dumb financial moves

Answer 9

Boy, I hate to be the bearer of bad news, but I doubt you can do what you are hoping to do. Most lenders today because of all the sub-prime bankruptcies are very cautious about refi's. Usually they will only refinance up to 80% of the appraised value. If you find one that will be sure to read all the small print and be sure you are getting what you think you are.

Good Luck.

Answer 10

To the best of my knowlege you can not borrow more than your house is appraised for. Maybe you need a new appraisal before you try to refinance.

You also might want to try getting a credit card for the smaller amounts that is one lower or even 0% for a year, and transfer all to that one card. Once that year is up, you can transfer to another credit card for 0%.