Currently have a USDA loan and needing to refinance...
My wife and I currently have a USDA mortgage loan (30 years @ 5.5%) and we would like to refinance due to the very low rates and the fact that we are beginning to feel the pinch of rising real estate taxes and insurance. We now make too much money for USDA loans with a household our size and we do not have much if any equity in the house. We purchased our house 2 years ago (2009) for $182,000 and were told by our realtor that the house had then recently been appraised at 198,900. I don't know what it would appraise for now and with money being tight I'm a bit afraid to waste the $475 to get an appraisal in case the value has severely dropped. What would be the best option for us to look into? I should mention that my wife was in the Army Reserves for 8 years. I have been told that might qualify her for a VA loan but I know they also require appraisals. I'm so confused but we need to refinance in order to be able to pay on our consumer debt. I would appreciate any advice anyone can offer. Thank you. by robestes from Herrin, Illinois. Sep 22nd 2011
William J Acres (William_Acres)
#74 ranked lender in Arizona - 8,728 contributions
If you make too much for USDA, then the best refinance option is FHA. FHA refinance will finance 97.75% of appraised value.. The home will have to be appraised, however based on your situation, you should be fine. If your home is worth $198,900, then 97.75% of that is $194.327. Your payoff should be around $178,000. you are well within the guidelines... You should contact a local Mortgage Broker (not a bank)... they have access to a vast number of lenders and they can match your particular scenario to the right loan / lender program.. WilliamAcres.com
James Barath (JamesBarath)
#9 ranked lender in Indiana - 352 contributions
Hi Rob. Based on what you have stated thus far, you still might be able to refinance through USDA under the Guaranteed Loan where the income limit is $74,050 for 1-4 person household and $97,750 for 5-8 person household. You may also be eligible for a VA loan with your wife if she has her DD-214. Of course your last option would be an FHA insured home loan. Either way, my team can help you through the process. Better yet, we can get an Automated Valuation Model done on your home so you actually knew realistically how much your home is worth before you expense $400 for an actual appraisal. If this is of interest to you, just email me direct at james@jamesbarath.com and my team would be happy to help.
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