Cashout Refinance

hi Naveen: Based on my understanding per your above comments sounds like a cash out ....Basically if you acquired the first mortgage first when you purchased your home and then later (12 mths) acquired a new 2nd loan, then this would be considered cash out if you are not going to do a refinance paying off both loans at the same time. Unless guidelines have changed I would say this subject new transaction would be considered a cash out. Mike Convin (Emery Federal Credit Union) NMLS # 754875 .... (703 505 5300)

hi Naveen: I think I misread your above...I will have to double check but might be considered a cash out..sounds like the 2 loans you acquired were after you purchased the home....Mike (703 505 5300)

Naveen, Good evening. Here is the right anwer to this... Your loan is not a TX cash out as defined by TX A6 laws so it is not subject to the 80% rule. If you are refinancing as a Fannie Mae loan to combine the two it may be considered a Fannie Mae cash out and limited to 85% of the loan to value since the second mortgage was not a purchase money second,but taken after the time of purchase. So, the answer to that is yes and no strangely enough since you have Fannie Mae and the state of TX's rules to look at. I am not sure how Freddie Mac treats it. Ask your loan officer to check Freddie's guidelines or call me and I will verify and can help further. Freddie's pricing has been off from Fannie Mae loans a little recently, but it may let you get the loan to value you need to make it work. You can also renew and extend around that existing second mortgage so you don't have to pay it off and don't have to ask the existing second lien holder permission for a subordination. It most likely would let you streamline the first to the 15 and may get you an appraisal waiver if it is owned by Fannie or Freddie currently. There are many ways to work out what you have. Hope you have a competent loan officer. Brad Cahoone - NMLS ID 184176 - Global Home Finance Inc. - NMLS ID 316441 - 972-724-3222 - globalhomefinance.com

Hello Naveen,This would be considered a cash out in Texas due to the fact that we are paying off a 2nd mortgage that is not indicated as "purchase money". I am a lender in the state of Texas for over 20 years and can help you with any questions that might come up. Eric Blossman 512-788-2502 www.TexasLenderOnline.com

The answer to your question has to do with how you structured the refinances. If the new 1st/2nd combo totaled the exact same or less than the payoff of the original purchase money loan, then trying to refinance the two back into one would be treated as a no cash out transaction. If however the total of the two new loans exceeded the payoff (because you financed the closing costs) then it is likely that the new lender will treat the payoff of the 2nd as cash out. Make sure you take a copy of your HUD-1 Settlement Statement with you when you meet with your Mortgage Banker/Broker. ~ Bert Carpenter, The LoansA2z team of NOVA Home Loans ~ NMLS 40586 ~ www.LoansA2z.com