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can you refinance and pull cash out after getting a loan modification?

I got a loan modification with a great rate (3%) but would like to pull cash out of my property to pay off some credit card debt since my homes value went up recently. the guys that did my last modification was amerifi mortgage they also do refinances but they said i wouldn't be able to qualify at this point. any other thoughts? 
  • September 19 2013 - Carlsbad
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Answers (6)

Best Answer

This would depend on multiple things: 1) How much equity do you have in your home?  When taking cash-out there are limitations.  These limitations vary based on the type of loan you are requesting.  Conventional loans are capped at 80% loan to value, FHA loans are capped at 85% loan to value, and VA loans are capped at 100% loan to value.  The loan to value (LTV) is the relationship between your property's value, and the amount you owe on that property expressed as a percentage. 2) Was your modification done through HAMP, or was it just a lender specific modification?  If it was done through HAMP, which means it will report to credit as a modification.  If so, you will not be able to reach your goal.  If it was a lender specific modification, you have a much better chance of getting this done, as long as you have the required amount of equity in your home, as mentioned above.  3) You most likely received a modification because of a hardship you are facing, or were facing at that time.  In most cases, it's a financial hardship.  Hopefully it doesn't, but if this hardship still exists, it will be difficult to qualify.  All the best! 
  • September 20 2013
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Profile picture for user1523521
I got a loan mod on my house in a few months ago for 1st and 2nd loans.  I want to do a cash-out refi again to combine my loans.  Is there a waiting period for me?  Can you refer some of the lenders to me?


Thank you,

Jennifer
  • January 16
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Profile picture for user40576531
ok yean thats what i thought as well. Brandon thank you for the big reply, it was really informative and helpful even though amerifi mortgage told me the same thing. I guess i have to wait for now because it wouldn'tmake sense to refinance and take my rate of 2% higher to pull more cash. Is there any lenders out there that can do a heloc with a good rate even after i did a loan modification?
  • September 25 2013
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Profile picture for Brookstone Mortgage
Did you get a principal reduction as part of your modification? If so, you better read the fine print pertaining to your ability to sell for a profit or pull cash out.
  • September 19 2013
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With 3% on your modified loan, you should look into getting a separate second loan, Home Equity Loan or Home Equity Line of Credit.   That would be more sensible than a full refinance which IF you could qualify for would end up raising your interest on what I suspect would be the considerable majority or the debt (current mortgage loan vs amount of cash you want).

To answer the question, modified loans can be refinanced under certain circumstances, one of which is usually 24 months of payments made timely after the modification.

  • September 19 2013
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Profile picture for Brian GFL Capital
might depend on the income and your credit score.
  • September 19 2013
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