Can I refinance my house even if I have a bad credit?
Here's the case: I've lived in this house for quite a long time now, and already built at least $400K equity. I still owe around $150K. Here's my concern: I refi my house last year and cash out $20K. My lender told me I need a co-signer in order to approved the loan.
I let my brother and his wife to co-sign, so they checked their credit and the loan approved. My biggest concerned was I only became a co-owner of my own house and they were became the primary borrower. Legally, they can do whatever in this house and it's not I don't trust them but let say something bad happened, like if my brother died or they filed divorce. Legally, my sister-in-law can get something out of this house, if I'm not mistaken. My only hope to get rid of their names is to refinance my house to my own name, but since I have a bad credit, can some lender approve it?
Please I need a good advice on how to refinance my house and by transferring the title in my own name.
- 1 decade agoFavorite Answer
With that much equity, any lender can take your loan easily even you have a bad credit. There are many lenders out there who can give you a different loan program. Regarding your problem, the only chance to get rid of their names is to either refinance the house or sell it. But if you ask me, I'll take the first option because it's hard to sell houses nowadays. If you refinance your house, you can easily get an extra cash out up to $100K, and the bank will be happy to provide you that amount. To get rid of your brother's name and his wife out of the title all they need to do is to sign a quit claim and your lender will do all those stuff, all they need is to sign it.
- GriffLv 51 decade ago
Typically, a re-fi is not as strict. Your problem now is you have other people on the loan. You should never have put them on to begin with. Whoever was advising you back then did you a disservice. I can't imagine anyone declining your loan if you had 400k equity vs 150k debt, heck, they'd WANT you to default. What is done is done, however.
You need an expert and that's not me. I would say contact someone that deals with subprime loans and get some advise. Talk to at least three different lenders. You will definitely lose equity in the deal, but you can have the house free and clear in your name. Ther had to have been other circumstances when you originally refinanced. Good luck.
- 1 decade ago
Depends on how bad "bad credit" is. Is you score 500 or above? That's the bottom cut-off for many lenders. There are lenders who will finance about anyone (especially with that much equity built up in the home.) The rates get worse as the credit scores go down though. In some cases trying to re-finance with bad credit is counter-productive as the payments can get very high. I would recommend consulting an attorney who specializes in real-estate to answer you legal questions. Your brother isn't necessarily a legal "owner" of your home just because he co-signed on the loan. Where do you live? State laws differ. I work for a Mortgage Broker licensed in AZ & CA.
- Anonymous1 decade ago
You need to shop around but do not be so hasty and get caught up in a high finance or a adjustable -on the hous eonly take a low finance fixed rate. If you cannot get a decent loan that does not hold jeopardies down the road-why a fixed rate is so important.-then make larger payments whenever you can but first check to make sure there is no penalty when you do that so the house gets paid off sooner. Check with a credit advisor how long it willtake if you make steady payments to get your credit to be better or what you can do now to get a better credit rating and then take it from there. I to establish crdit in another state-made a small loan from my bank-like $1000. did not use /spend the money but used it to make 4 paymens and then pai the loan off to avoid paying a lot in finance charges. I did this a couple o times to establish solid credit. The amount is small enough thaat itsnot a risk by the lender-I used the bank for its the best credit and low finance charge-no point in doing if you have a high finance charge. Do several of those-get your credit rating acceptable to where you can refinace at a low finance fixed rate only.(If it sounds to good to be true-do not do it)
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- Anonymous1 decade ago
First of all, you should never have done that! Who on earth told you that you needed a co-signer for a refi when you have that much equity? I can refi anyone with a pulse as long as they have equity in the home. You got bad advice! And who would do a refi for 20k with 400k in equity? The cost to refi has to have been almost half that.
Next topic: How to get out of your bad situation, Assuming you still have equity all you need to do is refi again, this time with someone that will explain it to you better. You probably will get hit with a pre-payment penalty but if you want out you might just have to do that. If you have questions you can contact me, my info is in MyQ&A.
Good luck!Source(s): Loan Officer
- 1 decade ago
Have your brother quick claimed off the title. Same with his wife. Then refinance the house with you and your wife (if you have one) soley in your name(s). I can put together a free loan estimate for you that is very competitive. Avoid working with loan officers, they usually need to charge higher fee's and closing costs to make a living because all they do is work under a broker and get a cut. Speak only directly to licensed brokers. That way you will most likely get the best deal. Good Luck!Source(s): i'm a nationwide mortgage broker
- Mark TLv 61 decade ago
Unless your brother and sister are now on the deeds to your house OR you have given them a formal; charge over your house, then I am guessing all that has happened is that they are "guarantors" of your debt.
You ought really to speak to whoever organised the loan for you - but I think you will find that your relatives have absolutely no claim on your home at all.
As for re-finacing, you need specialist advice on that from someone who asks you questions about your income, age, expenditure and so on. Without doing this properly and carefully people could give you some well meant but REALLY bad advice.
- abcdgoodallLv 41 decade ago
first, check with a real estate attorney about having your brother and sister-in-law "quit claim deeded" off the property. that is, they relinquish their interest in the property to you. it may or may not require the bank's approval, so your attorney could determine that.
if not, although you have bad credit (your words), you have a lot of equity. You'll certainly be able to get approved, just not under the best rates/costs.
if you happen to live in PA, NC or MD, feel free to contact me if you'd like to see what refinance terms are available to you: email@example.com.
- Anonymous1 decade ago
Talk with an experienced Loan Officer.Source(s): http://www.choicefinance.net/
- pattibcaclLv 61 decade ago
nope Idea at allSource(s): nope