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Tue Aug 25, 2015, 10:54 AM

could you share your thoughts about refinance please?

Hi, I'm stuck. We have my wife's parents living in our house while I'm serving in the Army. We're getting killed by the original mortgage my wife has--8% something interest. Trying to refinance and understand the best way to go.

They're giving us $300/mo. toward $940 mortgage payment. I think that means because we're getting less than market rent we can't claim any expenses (like depreciation) more than what they can give us?

It seems the only refinance we can look at is the rental property type loan, a little more expensive/difficult to qualify for. I don't seem to qualify for HARP because we're not living there.

It feels like a real catch-22. Any advice? Thanks!

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Reply could you share your thoughts about refinance please? (Original post)
roscoeroscoe Aug 2015 OP
Hoppy Aug 2015 #1
SheilaT Aug 2015 #2
Fresh_Start May 2016 #3
A HERETIC I AM May 2016 #4

Response to roscoeroscoe (Original post)

Tue Aug 25, 2015, 03:16 PM

1. $50 or $100 towards a consultation with an accountant will be worth your while.

 

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Response to roscoeroscoe (Original post)

Tue Aug 25, 2015, 03:23 PM

2. What Hoppy said.

 

First off you want to clarify if collecting less than market value for rent actually prevents you from depreciation.

Second, you want to pin down exactly what it would cost you to refinance. For that you're going to have to talk to a bank or two.

A few months ago I had a casual talk with my bank about refinancing my home, which has 24 years left on a 30 year mortgage, and the up front closing costs I'd have to pay were such that it didn't really make financial sense for me to do that. In my case, I do live in my home and I'd want to refinance to cut the time on the loan, and that would raise my monthly payment to an uncomfortable point for me. I'm not complaining. I'm happy to be buying, and the cost of the mortgage is worth it to me.

One other question: Could your in-laws afford to pay the actual current mortgage amount? Or something a whole lot closer to it? If that could happen, you can (I hope) someday move back in yourself and it will once again be your primary home and you'll reap the associated benefits with that when you or your heirs eventually sell.

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Response to roscoeroscoe (Original post)

Tue May 3, 2016, 02:37 AM

3. shop around a lot..

if you have good credit and income to support the loan, you should be readily able to beat the 8%

loan


I'm refinancing my mom's house (my husband and I pay for her home). Because we don't live in it, it counts as an 'investment' property. The rate I was quoted was 4% LTV ~ 50%

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Response to roscoeroscoe (Original post)

Fri May 6, 2016, 11:57 AM

4. Mortgages are absolutely NOT my forte', but I have a question....

Reading your OP leads me to believe neither you OR your wife live in the house? IS that right? Or am I missing something?

You said "because we're not living there"

If that is the case, why are her parents paying such a small percentage? Is this a case of 'well, they're family and all'.....?

If so, I understand, but...wow...what a bargain for them. What would happen if you told them the rent is going to have to double? Could they swing it? Seems they are taking advantage of a situation that you can hardly afford.

The legal questions I have no idea of at all and I agree with the suggestion of seeing a specialist.

You're in a pickle, no doubt. I hope for an amicable resolution.

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