Need some help before I arrange appraisal

[JML1976]

What is the name of your state? MA
I purchased a home approx 1 1/2yrs ago @ 193,000
I currently have the PMI. I would like to get a home equity loan to pay consolidate my credit cards (Im drowning with their ridiculous fees)
As it stands I do not have enough equity to pull the loan - the bank said I could pay for a new appraisal and see what happens.
They say they base it on 3 similar sales in the area - 2 houses next door to me sold at 219,000 last month- my home has a couple of extra amenities - like 2 car garage and central air
Can anyone advise me as to whether or not I should go ahead with a new appraisal - Will I gain enough equity to pull an equity loan?

Thanks very much - I appreciate everyones time

 

[HomeGuru]

What is the name of your state? MA
I purchased a home approx 1 1/2yrs ago @ 193,000
I currently have the PMI. I would like to get a home equity loan to pay consolidate my credit cards (Im drowning with their ridiculous fees)
As it stands I do not have enough equity to pull the loan - the bank said I could pay for a new appraisal and see what happens.
They say they base it on 3 similar sales in the area - 2 houses next door to me sold at 219,000 last month- my home has a couple of extra amenities - like 2 car garage and central air
Can anyone advise me as to whether or not I should go ahead with a new appraisal - Will I gain enough equity to pull an equity loan?

Thanks very much - I appreciate everyones time

**A: you missed telling us the most important information such as what your existing mortgage balance is.

 

[JML1976]

Sorry....We purchased home at 193,000 - Our balance on the mortgage is approx 185,000
And as I stated earlier just last month two houses next door to me sold @ 219,000

Thanks very much!!

 

[HomeGuru]

Sorry....We purchased home at 193,000 - Our balance on the mortgage is approx 185,000
And as I stated earlier just last month two houses next door to me sold @ 219,000

Thanks very much!!

**A: how much money do you need and what L/V is the bank looking at?

 

[JML1976]

I pulled this off of my banks website - I am looking for approx 20,000 to consolidate some credit cards and clean up my debts
Home Equity Loan
Combination of first mortgage with equity loan may not exceed $500,000. To qualify for rates below, the maximum LTV is 80%. Maximum loan amount is $300,000. Loans to 100% LTV are available at higher rates with private mortgage insuance. No application or processing fees. Rate reduced 1/4% on all equity loans with automatic loan payment from MFS&LA deposit account and 1/2% from an EZ Checking Plus account. Available only for owner occupied 1-2 family residence.(Registry recording fees will apply.)

 

[HomeGuru]

I pulled this off of my banks website - I am looking for approx 20,000 to consolidate some credit cards and clean up my debts
Home Equity Loan
Combination of first mortgage with equity loan may not exceed $500,000. To qualify for rates below, the maximum LTV is 80%. Maximum loan amount is $300,000. Loans to 100% LTV are available at higher rates with private mortgage insuance. No application or processing fees. Rate reduced 1/4% on all equity loans with automatic loan payment from MFS&LA deposit account and 1/2% from an EZ Checking Plus account. Available only for owner occupied 1-2 family residence.(Registry recording fees will apply.)

**A: Ok, so after you did the math, what did you come out with?

 

[JML1976]

Im not exactly sure how to figure it all out - thats why I asked

 

[HomeGuru]

Appraised value say $220K X L/V 80%= $176K.
Your mortgage loan is $185K. The numbers do not come out.
Unless you pay more for a higher L/V, the interest rate will be higher, more points and PMI. But even at that, I'd say it's too close. Unless, of course you get a much higher appraisal.

 

[amortgageman]

Your interest rate would definitely be higher than the teaser rate your bank is offering. Going all the way out to 100% financing would be in the mid to upper 7% range (HELOC, with prime interest rate plus margin), provided the rest of yor scenario would qualify. Hope that helps a little bit there.

Many will advise you to not securitze unsecured debt, but that is ultimately your decision. Think of it this way, consolidating an automobile loan, for instance, into a thirty year loan......... well, can you say 1974 Gremlin or 1974 Maverick. Those cars will be long gone before they are ever paid off. Again this is your decision.

On the other hand, if you do decide to take a second mortgage or line of credit, then get enough additional money out to pay down the balance and eliminate the PMI on your first mortgage. There could be some substantial savings in that situation.