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30yr Fixed to a ARM + Second/Credit Line

My home is need of some repairs. I was considering refinanicing my 30yr fixed to a 5yr ARM. My hope is to get a second or a home equity line of credit without increasing my current monthly payements. In the 5 year arm period, I would hopefully have the second payed off or refinance to consolidate both loans... any thoughts.
  • September 24 2013 - American University Park
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Answers (3)

Have you considered doing a renovation loan?  I offer programs for both conventional and FHA financing.  You can refinance your home to get the cash you need to do repairs in one shot.

Feel free to contact me anytime to discuss your options - I lend in MD, DC, VA and am local in Columbia, MD.
  • November 11 2013
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You're approach makes sense so long as the two loans together do not exceed 90% of the current value of the home.  The risk is not knowing what the rate will be when you decide to refinance the 5yr ARM to a 30yr fixed.  If you sell the home within the 5 years it is great idea, if not you bear some risk in dealing with a higher rate at that time, but then again perhaps your income situation is better than as well and the payments are not as important as getting the improvments done to your home.  Some things to consider before you move forward.
  • October 10 2013
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It depends how long you plan to keep the property.   Also what current rate you have locked on fixed rate and current loan amount vs. amount of cash out you are considering.  

Relying on a future refinance 5 years from now is not a good idea.    If you think you can payoff an entire new 2nd in only 5 years, then I would imagine a fixed second amortized over a much longer period would be a payment you can currently manage without sacrificing your existing fixed rate.
  • September 24 2013
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