You Need Cash! Click Here Now!

You Need Cash! Click Here Now!

HELOCs are back! HELOCs are basically lines of credit based on the equity in your home. You can take out a loan in the form of a HELOC or 2nd lien to raise cash, buy a pool or do some remodeling or several other reasons and needs.

Cash-Out Refinance

A refinance transaction in which the amount of money received from the new loan exceeds the total of the money needed to repay the existing first mortgage, closing costs, points, and the amount required to satisfy any outstanding subordinate mortgage liens. In other words, a refinance transaction in which the borrower receives additional cash that can be used for any purpose.

In many cases you can include the total closing costs for a refinance transaction within the new loan. This allows the borrower to refinance the property with minimal out of pocket expenses.

Normally the only out of pocket expense for a refinance transaction is the appraisal fee which is paid COD when the appraisal takes place.

Cash out sometimes hinges on the value of your property. So talk to your lender and see what the comparable values (comps) are for your property before moving forward.

In addition to the value of your property, you may be limited by your FICO score and how many late payments you have made in a 12 month period as to what Loan To Value (LTV) you can cash out to. A poor credit rating may mean a lower LTV that you can cash out.

You can take cash out for many reasons, home improvement, debt consolidation, vacation funds or just extra cash on hand.

Texas cash out loans have some of the strictest guidelines available. Homestead owner-occupied properties can have an LTV no higher than 80% and the homeowner must have a 12-day waiting period before closing.

Cash out loans frequently allow consumers to save money by paying off higher interest rate debts with the proceeds from their refinance

Rates on cash out home loans are typically much lower than those on credit cards and other types of consumer debt.

By taking a cash out loan to pay off credit cards or other debt, you may be able to write off the interest on your taxes. You should talk with your tax advisor for more specific details.

Cash-out refinance differs from a home equity loan (HELOC)in a couple of ways. A home equity loan is a separate loan on top of your existing first mortgage. A cash-out refinance is a replacement of your existing first mortgage. The interest rate on a cash-out refinance may be lower than the interest rate on a home equity loan.

Cash-out for funding an investment makes sense. Instead of remaining dormant as equity in your home let your money work for you in an investment vehicle.

Need money for College? Refinance your home now and fund your children's education while reaping the tax benefits.

The holidays are nearing and your short on cash. You can do a cash-out refinance instead of using credit cards and you will enjoy a lower rate and payment.

Cash out-Refinance also considered in Debt-Consolidation or Cash in hand. Money can be used for a future investments, College, IRA, or Retirement Account. Money can be used to pay off current monthly debt which could lower your personal Debt to Income. Consult a Mortgage Professional in regards to how much you should extract from the EQUITY built into your HOME.

There is no better way than to combine all of your non-deductible debt and turning is to all deductible. This is also a great way to free up cash for investing.

Some types of properties will have cash out restrictions. You should check with your lender or broker to find out what types of properties have them and what the maximum loan-to-values (LTV) are for those properties.

Cash-out refinancing differs from a home equity loan in a couple of ways. First, a home equity loan is a separate loan on top of your first mortgage; a cash-out refi is a replacement of your first mortgage. Second, the interest rate on a cash-out refinancing is usually, but not always, lower than the interest rate on a home equity loan.

Simply defined, cash-out refinancing is when you refinance your mortgage for more than you owe on your existing mortgage(s), then pocket the difference

Of course, the best way to tell if a cash out refinance makes sense is to actually sit down and do the math. You can consult a refinance calculator and a home equity loan calculator and figure out how much you will save in the long run. Compare the total amounts you will spend in interest and fees. Contacting a loan specialist should be able to help you figure out what makes sense for your needs.

A cash-out refinance is the process of taking out a new mortgage at an amount that exceeds the existing balance on the current mortgage in order to refinance the original mortgage and receive additional cash for other uses. A cash-out refinance will often carry a slightly higher interest rate. The higher rate is based on studies of delinquency and default which indicate that borrowers who do a cash-out tend to have poorer payment records than borrowers who don’t. The theory is that borrowers who need cash are financially more vulnerable than borrowers who don’t, and in some cases they may be more likely to fall behind on their mortgage payment.

Note: If you are refinancing to consolidate non real estate debt, you are doing a cash out even though you may never receive any cash directly.

The interest rate charged on the "cash out" portion may be less than the rate charged on a credit card. Using this financial tool to pay off high interest rate debt should be considered when consolidating loans.

When you refinance and take cash out to pay off your bills and consolidate debt, not only do you save the trouble and expense of writing and mailing all those different checks each month to all of your different creditors, you also can save up to 50% or more off of your current total monthly expenses. This puts money in your pocket each month, and can save you thousands of dollars each year.

When a borrower finances a new mortgage, that is more then the balance on the present mortgage, and take the cash difference for other uses.

Cash-Out Refinances allow you to use your homes equity now. Instead of waiting till you sell the property you can use the appreciation for things that matter now. Common uses for a Cash-Out Refinance are paying off student loans, credit cards and cars. Some people use the money for a much needed vacation!

Most loan programs call for the borrower to have 2 to 6 months of reserves after all closing and settlement costs of a refinance. This means if your total monthly payment (PITI) was $2500, you would be required to have verifiable and often seasoned money in liquid assets of $5,000 to $15,000. Fortunately, some lenders actually allow the borrower to count the "cash in hand" or residual cash received outside of settlement to count for this requirement. Thus, if you were getting $20,000 cash out net after all other expenses and pay-offs, your reserve requirement would be met without verifying personal liquid assets.

Most borrowers expect their payment to go up with a cash-out refinance, but you may actually be able to lower your payment AND take cash out. Your interest rate, LTV ratio, and cash out amount will all come into play.

Your home is one of the quickest growing investments. You can cash out in some cases up to a 106% of the house value depending on several different factors. A lot of borrowers use the cash out for home improvements, pay off high interest credit cards or personal loans, pay for school, personal use, etc.

In Texas, once a cash out, always a cash out. That means any more refinances down the line will have to conform to Texas cash out rules until the homeowner sells the home.

Pay off those high-interest rate, non-tax deductible credit card bills now with a cash-out refinance or a home equity line of credit (HELOC). Contact your trusted local mortgage lender today!

States and Lenders both have there own ideas on what is cash out and what's not. It's best to find a good broker to work with that is knowledgeable with both state and lender guidelines.

When you default on most personal debts, you cannot be forced to sell your home in most cases, whereas defaulting on a mortgage loan can end in a foreclosure. When doing a Cash Out Refinance to consolidate credit card debts, keep in mind that you are turning non-secure debts into a lien on your home.

Another popular use of the cash out refinance is to buy investment property. Sometimes first time investors will do this to get equity out of their primary residence for their first purchase and then snowball it using the same type of cash out loan to keep acquiring property.

Often investors use a product called a "no seasoning" home equity line.

They regularly use this to reap the equity from a property bought below market generally to reinvest in a new property. What "no seasoning" means is that the property could have been bought and closed on yesterday, and have a new loan taken out against it today.

Cash Out mortgages usually carry a slightly higher rate but lenders will often times allow up to 2000 dollars to be given to the borrowers at close before it is officially considered a cash out refinance with the higher rate.

With a cash-out refinance you can usually avoid getting a higher rate as long as you keep your LTV (Loan to Value) below 70%. So if you have a home worth 100k and you want to try to avoid the higher rate, try to keep your new loan amount at 70k or lower.

Depending on you credit you are not limited to 100% of the value of your home. With good credit you can take out a loan to 125% of the value of your home.


In Texas, the cash out refinance is limited at 80% LTV for an owner occupied property. Also, once the mortgage is refinanced as a cash out loan (Home Equity Mortgage), the mortgage needs to be refinanced as Home Equity mortgage in future refinancing. Once it was a cash out loan, it will forever be a cash loan until the property is sold.

Keep in mind that you may have to pay for private mortgage insurance if you borrow more than 80% of the value of your home even though you are refinancing and not purchasing your home. In order to avoid this, make sure you do not exceed the 80% mark. If you must, talk with your mortgage professional about the ways you can avoid PMI.

Some borrowers treat their home like an ATM machine, drawing upon its equity at every increase in value.

A cash-out refinance can be valuable when used properly. It may not be advisable to simply spend the cash out money on vacations or material objects. Be advised that this money is a loan that is accruing interest and must eventually be paid back.

Vince Gutierrez

Vinni100@netzero.net

Jimmy Page's Yardbirds

Jimmy Page’s Yardbirds

I was 15 when I lived in Cupertino California and went to see Led Zeppelin at Keezar stadium in San Francisco with my friends. It was near the end of the school year in 1972. I was finishing up my freshman year. Prior to that I saw Leslie West of Mountain and Jack Bruce from Cream play at Winterland also in neighboring San Francisco. Amazingly I still have both ticket stubs (somewhere).

What probably changed my life and my guitar playing was seeing Jimmy Page in person for the first time. Houses of the Holy had just come out and I bought a copy upon its release. I picked it apart note by note and guitar lick by guitar lick. Jimmy Page exceeded my expectations and I was thoroughly enamored by the whole Led Zeppelin spectacle.

I had a cousin who had told me he saw the Yardbirds several years earlier. Even though he told me he thought they sucked, I was impressed as I owned at least two Yardbirds albums. One had Eric Clapton and the other was a live album with Jimmy Page. One song in particular that impressed me with Page on guitar was “Over Under Sideways Down”. Page wasn’t on the original version of this song, but he did the tune justice live. There was a certain guitar lick that in hindsight was much alike a riff in Moby Dick and Heartbreaker from Led Zeppelin two. I’d have to show it to you. It much resembles what we guitar players might consider to be a “hammer-on”. Whatever!

The Yardbirds were obviously yesterday’s soggy cereal and Page was advancing without them. Clapton was long down the road with Cream and Beck had long since formed the Jeff Beck Group with a new talented singer by the name of Rod Stewart.

Jimmy Page knew in advance there would be little point in reforming and reinventing the already outdated Yardbirds. Its true Jimi Hendrix put a positive spin on playing lead guitar and bending notes, but Page learned how to bend strings from legend blues players. Hendrix didn’t invent it, he emulated it into his own style. Page did the very same thing but added principles acquired from years of playing in various musical settings. It’s been claimed Hendrix set the standard for heavy rock guitar playing which is an absolutely false premise.

The Yardbirds had a substantial draw when realized by ticket sales. It’s also true that Page saw the advantages of the larger crowds and bigger venues away from the club scene. Page heard a bigger sound that was very soulful, but also bigger than life. “Heavy”. The Yardbirds could never fit this profile Page had in mind. Robert Plant and John Bonham were the newer and more modern energy Page was hearing and wanted for the new band.

The band would need order. Page knew this well ahead of the venture. In the process of finding the right session musicians, Page enlisted an old friend, John Paul Jones. Jones would be Page’s production mate. However, instead Jones fit perfectly as a forth member of the band in a position where a handful of session musicians were discarded.

A small number of “takes” like Dazed and Confused had proved Jones to be more than just a sideman or a simple session player. Jones clicked with the band plain and simple. Page didn’t need to look any further. He had precisely what constituted the heavy sound he was striving for. From that point forward Page did what he did best. He wrote songs and guitar parts. Plant chimed in at first with basic lyrics and ideas he had penned previously with other groups that didn’t gain momentum and the nucleus of the writing pact had begun. Did Page write lyrics? Did Plant play guitar? Plant knew enough guitar to write melodies and Page knew enough about lyrics to fill holes and guide Plant’s amphonic voice and versatile talent. John Bonham provided a very strengthened and steady beat. John Paul Jones played all the right bass lines and filled in the missing pieces with his keyboard skills.

By the time the second Led Zeppelin album arrived at the record stores, album sales outpaced Led Zeppelin’s bookings not only in Europe, but in the states. By the summer of 1971, Zeppelin was touring their first album while their second album was airing and climbing to the top ten. The tour was halted momentarily to regroup and retool from minor television spots to greater plans of full scale shows in stadiums all over the United States.

Where the Beatles invaded America and played a good share of large auditoriums and large venues, Led Zeppelin conquered arrogantly and loudly. Led Zeppelin was a first of its kind and an invention of its own making. There was nothing close to the magnitude of Zeppelin in sound and stature. Certainly Zeppelin was so much louder than anyone else had been before. A newer and advanced sound technology was setting foot in large rooms and Led Zeppelin stepped in with two feet well planted.

But it wasn’t that Led Zeppelin was loud or had bigger amps than anyone had ever had. There was a lot of excitement in the air as rock was making yet another change and a new era was coming into play. Hearts were beating harder and toe tapping became stomping feet. The chords were struck and could be heard everywhere with Whole Lotta Love and the beat thundered with songs like Moby Dick. The new standard followed and we were all there to bare witness.

I was watching some Youtube clips recently of Led Zeppelin minus the deceased John Bonham with Jason Bonham filling in his place. Jimmy Page appears to be an older yet sober rock guitar god and Plant looks much older as well. But their songs still remain the same. So many young guns have tried to copy Page and very few singers come close to making the sounds Plant made as a young man fronting one of the greatest bands in rock and roll history. There just isn’t another Led Zeppelin somewhere else in time. This was the one and only. Ironically, when they are all finally gone and laid to rest, so will I.

Matilda

Matilda

The current state of credit in the US is the worst possible situation imaginable. Look at all the foreclosures. Look at all the ads to stop foreclosure next to the ads that tell you how easy it is to buy whatever you want on credit. How many people do you actually know that put money into savings on pay day? Do any of these folks still exist? Look at how our government is handling debt, not the debt to pay the lights at the White House, but the debt of the entire country. “Go out and spend” isn’t patriotic. It’s just plain stupid. And each sub middle class household across the country hasn’t two nickels to rub together much less pay their bills with the money they have. Why? They spent it and then some. But it’s not just them. It’s everybody else too.

Don’t get me wrong. I am not innocent either. You are looking at a guy that just sold next to the last of his music gear so his car insurance wouldn’t lapse and his utilities would remain on. And if the future yields promise, my application at the nursery across the way will be accepted and I’ll be pushing plants part time so I can keep my mortgage business operating on the fly. But worse, I am the (mindful of the penis) infatuation struck hero wannabe that forked over the remainder of his nest egg to bail out a girl I met on MySpace that would have lost her car and home hadn’t I arrived to save the day and keep her solvent to the tune of 10 months (about 15K) or so worth of bills (not my own). I am also the romantic goon that plunked down 2500.00 in small ones for a ring I never laid eyes on much less received for a girl I never married who has since then married someone else of course. I do have store credit. But I can’t get this jeweler in Georgia to sell me anything to close the account. I live in Houston. His store is in Georgia. He has no website. He’s about to have a different set of complaints (or at least a new one) come the following week. I’ll get into that another time.

For the last five years or so, it has been advertised for the masses that anyone with a pulse can obtain financing to buy a home of their choice with zippidy doo da down! My heart goes out to all of those folks that scrimped and saved for a down payment for the home they now live in. If their jobs are intact, they’ll be living there from now on and most likely until retirement. Simple planning promotes the least likelihood of failure. My parents were a class example and the model of doing it right to avoid catastrophe. My folk’s first home was less than 19,000.00 in Scottsdale, Arizona back in 1968. Their combined salary at that time wasn’t anywhere near 1000 bucks. Can you imagine that? In fact George, fresh out of college, got an offer from Shell Oil for a starting salary of 400.00 a month. When we moved to Arizona, Sylvia worked at Motorola for a trade wage of 2.50 per hour. How much did they save and for how long? I remember powdered milk. Had there been Romon noodles, back then they might have cost something like 60 for a dollar.

This was a few years ago. Sitting across from me at my office was a newly married young couple in their late 20’s. Our meeting was to determine what program they could qualify for so they could buy a new home. Their preconceived notions were neatly in a bag they brought with them. There weren’t any bank statements or tax returns. But some colorful brochures of homes on a man made water front somewhere in Sugarland. Leo and Carol were going to apply for a mortgage for a large home. Each of them has new jobs they had started in the last year or so. They have a couple of thousand bucks between them and as they have told me, their parents can help if need be. Groovy! I just love being an order taker instead of a consultant or counselor. Further, I pull their holy credit report. We have a few garden variety charge cards, a MasterCard, a his and hers visa, two car loans and some serious bad stuff (I am not allowed to say shit in place of stuff).

The bad stuff is as follows. We have a series of collections including medical entries like hospital visits for the emergency room or whatever. There seems to be an apartment complex that didn’t get paid at some point. That happens. There are a couple of cell phone companies unpaid for whatever reason. That’s acceptable. Back then, these cellular plans weren’t as liberal and cheap as they are today. So, I don’t blame our thespians here at all. But here’s the problem I have with these two. There seems to be a credit card with an outstanding balance of 12,000.00 (dollars, in case you are from a country that has pesos). Here’s why I have a problem.

For starters, after so many years of trying to maintain credit to the extent that I am able to have any credit at all, I have never even had an available credit line on any thrift account of more than 2000.00. I asked my applicants what’s the story with this credit card. Is it theirs? Is it a mistake? Here’s the answer they gave me. “We used that card for our wedding and honeymoon and we went on a couple of trips. Besides, we are disputing that card anyways….”. This is the part where my inner rage wants to increase the level from simmer. Yet I quietly remind myself my job is to provide a loan solution for these little monsters. After all, that’s what pays the bills and keeps my love life active.

Was it my place to be good cop bad cop and interrogate these little larcenists or should I lay low and make the deal happen? I selected the latter. After all, the credit report did state the entry was in dispute. I can’t imagine a mafia loan shark seeing it quite that way, but oh well. Besides, they got their deal and their parents loaned them 10,000.00 for the venture. What do I care?

Back to my parents and their first home. My mom found a used refrigerator in the newspaper to help furnish our new kitchen. The fridge was clean and well taken care off. She paid 20.00. In contrast, Leo and his delicious little minx opened an account at Conn’s and bought all the appliances straight out of the pictures in “Home Decorating Monthly” to suite their needs. Best Buy provided the entertainment along with a few extras. How do I know all this?

A few months ago they returned. The game had changed and some new hurdles were added. Deep in debt, a consolidation loan of sorts was on their minds. Looking at their credit made me fearful. It didn’t make me fearful for me. I couldn’t obtain their credit to buy a boat. They were not only maxed out, they had no equity. No equity because they didn’t put any money down and not enough time and payments had passed for them to be able to borrow anything using their home as collateral. I couldn’t even refinance them because rates were higher and the rate they were given was reasonably low compared to the present. I don’t even want to write about what I told them about credit counseling and how they could get some credit counseling company to negotiate their debt and get a lower payment.

What comes to mind is my mom. What would my mom have done in the above scenario? NOT A THING! She was never that stupid. She, like my father grew up poor in a coal mining town where the only available credit was at the Union Pacific store. IF and I mean IF Sylvia landed there in a debt crisis, she would probably knock on Motorola’s door with hat in hand. My dad would work at night drawing for other engineers and architects OR he’d sack groceries.

Leo and what’s her name might be in foreclosure. If they are, they join millions of Americans that don’t have a clue. As consumers we are seeing the results of this type of debt strategies. Let me regress. There is no strategy here. This is clearly theft. Credit is a privilege. If you can’t afford it, don’t buy it (sign it or whatever). Fucking up your credit and going into default makes interest rates go up and charge card companies rotate higher fees along with higher interest.

Sometimes I become so mad I could scream. But who would listen.

Back to my damsel in distress. The one I bludgeoned my nest egg for to ingratiate her life style momentarily. For the sake of anonymity, we’ll call her Matilda.

Matilda experienced a divorce from a man that didn’t like to pay bills and yet spent the family’s money on extra marital affairs. Matilda was his second wife and he had two likeable kids from the first. Our lover eventually lost his house to foreclosure. It’s beyond me how he got it in the first place. Oh yeah. Now I remember. Ralph (that’s what we’ll call him) is somewhat like Leo. Let’s move on. Matilda receives a settlement from the divorce of about 10,000.00. Seems like a lot of loot. Sylvia would have saved it. I would have used it to pay some chick’s debt.

Matilda meets Lydia. Lydia works at a mortgage office as a loan officer. Lydia tells Matilda we can get you in a new home with no money down from a program titled “the Acorn Program”. “Woo hoo” Matilda exclaims. Now we’re off to the races. Lydia explains that the first couple of years are interest only so you can get on your feet. But afterwards, the payments will go up and the interest rate is adjustable. Matilda doesn’t flinch as she signs all the documents. Matilda sees the larger picture: “I can take care of Ralph’s kids and they can each have their own room”. That’s a nice Christian approach notwithstanding that meanwhile, our lover boy is still out spending money he doesn’t have on women that are someone else’s instead of paying for his own kid’s school supplies and clothing. I could write a book about this guy but I’d only sell one copy.

Matilda has decided the old clunker she is driving has seen better days and a better newer vehicle would be more prudent. She has a very valid point. If you have ever lived in Georgia, you have done your share of commuting from point “A” to points “B” and “C” and destinations in between. Gas isn’t cheap, so at a minimum you’d better have reliable wheels.

But wait! We just signed on the dotted line and committed the rest of our life’s income to a house payment that will eventually go up. Maybe we should have rented and then bought the car. Remember the ten grand? I’ll let your imagination linger with all the factors attributed to a new home in the hills, new car insurance, cable and whatever I have told you about Ralph’s personal life. Forget the ten grand. Some would characterize that amount of money as chump change. Sylvia wouldn’t have. Neither would I if I didn’t own and operate a penis.

If you are going to buy into the housing market, you should make some sacrifices and add up all your bills. But more importantly, you should save and plan for the event. I welcome with open arms the new bankruptcy regulations where you can’t just file to skip out on debt. I say this not for the reasons you might imagine. In fact how will my mortgage business survive if I can’t get Leo and his pals a loan? Even so, now Leo and his lady along with Ralph and Matilda are shit out of luck unless they pre plan and save from now on.

Our government in all their infinite wisdom is lowering bank rates as we speak to loosen credit. The credit that gets unrestrained, you’d think would go to businesses and enterprise to build a better and more stable economy while creating jobs and wealth. It’s not. It’s going to people like Leo that will never pay it back.

I remember hanging out in a library that was in Ralph’s neighborhood. I was there waiting with Matilda for Ralph to pick up his kids that happened to be with us. (They were nice kids. He is and always will be a total jerk). I wasn’t to be seen. I was holding up a book identical to a book Matilda had bought a week before from a book store we were at. It was a joke. She didn’t get it. Neither did I. The joke was on me.