Please help - Re-fi questions

**indoman** · 12-23-2008, 11:20 AM

Idea: trying to re-fi and pull some equity out of my rental home. going to use the cash to pay off the one CC we have with a chunk on it. i'd rather carry a bit more on the mortgage than the balance on the CC. ...figuring with the really low rates right now my monthly cost would end of being the same anyway. i'll also do the bi-monthly payments to make up some lost ground on payoff going forward.

Problem: the bank says i should expect to pay 1-2 points higher on the interest rate and the closing costs would be 2-3X higher than on my primary home. also, they'll only lend 70% (at best) of the value of the house since it's a rental. making this type of deal nearly impossible. i'm in a market that has slowed but has seen VERY little downward adjustment during the current real estate "collapse".

is the bank guy talking straight? any creative ideas on how to get around this?

Thanks.

**Greebo** · 12-23-2008, 11:59 AM

Not what you're asking but...
I wouldn't even consider this unless you cut up the stupid credit cards first.

Otherwise its far far too easy to fall back into the same situation, only now with a bigger mortgage.

As for what the bank says - you will have to shop around, but investment mortgages are always more expensive, I know that, cause our rental mortgage is 7.25%, and we opened that in april when other rates were 6.

**Grayce** · 12-23-2008, 09:09 PM

I would never replace unsecured credit with secured.

**Ilovesewing** · 12-23-2008, 10:19 PM

I think the bank guy is right - whenever it's not your personal residence the cost is higher.

If you do this I would cut up and close the credit cards so as to not be tempted to run them up again.

I would also run the numbers and make sure this is saving you money. Maybe just buckling down and paying off the credit card would be a better solution?