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What type of loan?

I just purchased a house in March of 2013. A situation has come up since then where I need to pay off the remained of my father's mortgage to keep him from being foreclosed on. 
My original mortgage was for $180,000 30 yr fixed rate of 3.85%.
The new loan will need to be around $18,000. 
I'm trying to figure out what would be the best way to go here. Should I consolidate the two together by refinancing? Should I take out a personal loan... Any advice would be greatly appreciated. 

Justin
  • May 09 2014 - Baltimore
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Answers (5)

If you're looking to free up some cash you can either do a cash-out refinance or home equity line of credit. Both of these options will allow you to free up some cash to help out your father. In order to have these options, you will need to have a decent amount of equity in your home. So the best thing for you to do is to speak with a knowledgeable lender to see if you can get started on refinancing for your situation. If you need additional assistance, feel free to reach out. Good luck!
  • May 09 2014
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Profile picture for CA Direct Lending
Given your current low interest rate and the fact that you need a relatively low amount of cash out, I would recommend a home equity line of credit for the $18,000 you need.  

Conventional interest rates are higher today than what you currently have and equity loans are relatively inexpensive and quick to get. 

If you have more than 20% equity in your home, contact Schwab.  They have the lowest rates available and no fees.  If you need up to 90% of the value of your home, I can recommend a loan agent licensed in your state who can arrange a home equity line for you. 
  • May 09 2014
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I think you are saying that you would like to take equity out of your home in order to help out dad? If this assumption is correct, then you need to have adequate equity in your own home to do this. What was the percentage of down payment on your purchase in 2013?
  • May 09 2014
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Profile picture for JoshBarnettREIB
Contact your local lender and get the info straight from the source. 
  • May 09 2014
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Is this all on the same mortgage or does your father have a seperate home/mortgage than the one you are talking about ?

I doubt you have any equity in the proeprty yet to be able to do an equity loan against your property so I would contct a local bank or credit union to see about a personal loan. For that amount, no lender will be able to lend yo you as far as the larger lenders are concerned.

Hope that helps and good luck !

-Scott
  • May 09 2014
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