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Student-Loan Refinancing Boom Could Cost U. S. Taxpayers Billions – Bloomberg Business #24 #hour #loans

#refinance student loans

Student-Loan Refinancing Boom Could Cost U.S. Taxpayers Billions

Chris Winiarz, a 31-year-old money manager with a Northwestern MBA, jumped at a student-loan deal of a lifetime.

A startup called SoFi offered to refinance his $45,000 in federal debt, slashing his interest rate to 2.69 percent from 6.55 percent. Winiarz will pay off his obligation three years early, saving about $9,500 and helping pay for an engagement ring for his girlfriend. The company even threw in a free bottle of artisan olive oil.

“I really should have done this a lot sooner,” said Winiarz, who helps oversee the University of California’s endowment and pension investments.

In a growing refinancing boom, a new generation of private lenders — backed by hedge-fund billionaires and Silicon Valley royalty — is targeting successful graduates with professional degrees and student loans. For the borrowers, “it’s an uncashed lottery ticket,” said Brendan Coughlin, head of education finance for Citizens Financial Group Inc.

There’s a catch. Their good fortune could cost taxpayers billions and damage the credit quality of the government’s $1.2 trillion student-loan portfolio, the biggest pool of U.S. debt, except for mortgages. That’s because professional-school graduates and other borrowers with successful careers subsidize the less fortunate, who are more likely to default .

“Cream-skimming by private lenders will remove these profitable loans and leave mainly — or only — the more risky loans,” said James McAndrews, executive vice president and director of research at the Federal Reserve Bank of New York.

Looming Bills

Traditionally, the student-loan program returns money to the U.S. Treasury. Now, the exodus of its most reliable customers could lead to losses.

“This is one of those looming financial bills that is going to come due,” said Jaret Seiberg, a Guggenheim Securities analyst. “If the best borrowers leave, taxpayers are going to have to ante up even more cash.”

The government will be left with a greater share of borrowers like Jennifer Rejon. A 29-year-old single mother of a 10-year-old daughter, she has $17,000 in federal loans. They helped pay for a medical-assistant degree from Corinthian Colleges Inc. a for-profit chain of schools that filed for bankruptcy in May. The U.S. Education Department this week said it may forgive hundreds of millions of dollars in loans to Corinthian students.

Under a federal program to help low-income borrowers, Rejon, who lives in Chicago and has struggled to find a job, isn’t making payments.

“I’m trying to at least get my life on track and be able to pay my bills,” she said. “The loans are the last thing I’m thinking about.”

Screening Borrowers

Rejon wouldn’t qualify for refinancing from private lenders because they screen borrowers based on creditworthiness and university quality. The government writes loans for any student who enrolls in an institution eligible for federal aid.

Borrowers holding about $150 billion in federal loans have strong enough credit that private lenders could offer a cheaper rate, Goldman Sachs Group Inc. estimated in a March report.

Refinancings are likely to reduce by as much as $10 billion to $20 billion the value of the federal portfolio because of lower income from loan payments, primarily for graduate school, according to Deborah Lucas, former chief economist at the Congressional Budget Office and now a Massachusetts Institute of Technology finance professor. Education Department spokeswoman Denise Horn said prepayments aren’t yet significant, and the student-loan program’s goal isn’t to turn a profit for the government.

Undercutting Government

The situation is another consequence of historically low- interest rates. as well as a peculiarity of higher-education finance. Congress sets federal student-loan rates, and older obligations now demand as much as 8.5 percent annually. For decades, government loans undercut the private sector. Now it’s the other way around.

Congress could let all federal student borrowers refinance at lower rates through the government itself, as Democratic U.S. Senator Elizabeth Warren of Massachusetts has twice proposed in the last year, to no avail. Republican opponents said the bill did nothing to curb the current and future cost of college.

That leaves an opening for newcomers like SoFi, formally known as Social Finance Inc. and established players such as Citizens Financial. Private lenders have refinanced about $3 billion to $4 billion so far, according to Stephen Dash, chief executive officer of, a website that compares refinancing rates.

Prominent Backers

That number is sure to rise, since better-quality borrowers have no logical reason to stay put and subsidize others, said Vince Passione, founder of Lendkey Technologies Inc. which connects students online with private student-loan lenders. In April, an affiliate of Apollo Global Management LLC, billionaire Leon Black’s private-equity investment shop, said it plans to invest $1 billion in refinanced student loans through LendKey.

Other big names are taking notice. A company called Earnest, which started online student-loan refinancing in January, has backing from Silicon Valley venture-capital firm Andreessen Horowitz, famed for helping seed Facebook Inc. SoFi’s investors include another hedge-fund billionaire, Dan Loeb, and Peter Thiel, a co-founder of PayPal.

New York-based CommonBond Inc. — founded by three classmates from the University of Pennsylvania’s Wharton business school — rewards borrowers with dinners at popular spots such as Grafton Street, an upscale pub near Harvard in Cambridge, Massachusetts. It also offers $200 for referrals.

$140,000 Income

The average CommonBond borrower is a 32-year-old who makes $140,000 annually and has a near-perfect credit score of more than 760, said 34-year-old CEO David Klein. He took a break from Wharton three years ago to start the company, backed by education-finance company Nelnet Inc. and Vikram Pandit, Citigroup Inc.’s former chief executive.

Even for strong borrowers, there are risks to forsaking federal loans, which feature reduced payments for borrowers who get sick or lose their jobs, according to Rohit Chopra, the U.S. Consumer Financial Protection Bureau’s student-loan ombudsman.

“They should be aware of what benefits they’re trading away to get that lower payment,” Chopra said. The loans — such as the one to Winiarz, the California money manager — can be variable and reset monthly, exposing borrowers to the danger of a sharp spike if the economy shifts

For now, taxpayers will be funding a greater share of borrowers like Noelle Liptak, who lives near Akron, Ohio, and makes $40,000 a year as a marketing representative for a plastic-bottle manufacturer.

Liptak, 31, has almost $100,000 in federal student loans from college and an MBA from Point Park University in Pittsburgh. A government program currently lets her pay $46 a month, and her loans may be forgiven after 25 years.

“I don’t expect to ever pay them off,” Liptak said.

Auto Loan Refinancing #private #school #loans

#refinancing auto loan

Auto Loan Refinancing

What Is Auto Loan Refinancing?

Auto loan refinancing is the process of paying off an existing loan on your car or truck and starting a new loan. This may be done with the same lending company you already have or a new lending company.

Applying for a car loan refinance can be a somewhat complicated and work-intensive process in which you have to provide information about your:

Lenders will use this information to determine whether they think you qualify for a new loan with better terms than you currently have.

Visit our page on How to Refinance a Car Loan for more information.

Why Refinance a Car Loan?

Generally there are two reasons people choose to refinance their car loans:

  • To save money.


  • To lower the monthly payment on the loan.
  • Saving Money

    Many people opt to refinance their car loan with a lender who is offering a lower interest rate than you already have. With this option, you can save money every month due to the lower interest rate.

    You can also choose to refinance with a lender who will shorten the length of your loan by keeping the same interest rate for a shorter amount of time. Note that your monthly principal payment may go up, but the amount you pay in the long run will be less.

    Lowering Your Monthly Payments

    You can refinance your loan to lower your monthly payments without changing the actual amount of money you owe through the lifetime of the loan. This strategy is often used when there is a change in someone’s income and that person can no longer afford the monthly payments.

    In this case, the lender offers a lower monthly payment plan, but extends the length of the loan. Because you will be paying the interest rate of your loan over a longer period of time, this type of loan refinance may end up costing you more in the long run .

    When to Refinance Your Auto Loan

    Choosing whether to refinance really depends on your personal financial situation. For some people, saving $15 a month isn’t worth going through the trouble of all the paperwork. For others, a monthly $15 savings over the life of a long loan makes a big difference.

    The two big triggers that create potential savings are:

    • A change in your own credit score.
    • A change in rates being offered.

    Credit Score Changes

    If your credit score was low when you first received your loan, you may find that a positive change in your credit report may earn you a lower interest rate on your auto loan.

    It’s always a good idea to keep an eye on your credit score, which you can order for free once a year from the main credit bureaus. Many services also offer free alerts regarding interest rate changes.

    Interest Rate Drops

    If interest rates on car loans drop, you may be able to refinance your car loan for significant savings. Keep in mind, however, that you will not typically see savings unless the interest rate drop is at least a couple points .

    Try calculating the interest rate change that would make a difference for you by using an online car loan refinance calculator.

    Auto Refinance Hurdles

    There are some cases when it’s not a good idea to refinance, and some cases where it is close to impossible.

    Generally speaking, it’s hard to save money when you refinance an auto loan (or get a loan at all) if:

    • The car is a few years old .
    • The car has over 100,000 miles on it .
    • The loan amount is higher than the value of the car itself .

    Since the car serves as collateral for the loan, it makes sense that lenders want the car to have value in the event they repossess it.

    However, because locking in a lower rate can change your monthly payments so dramatically, there is no reason not to shop around and see if you can find a lender that offers a better deal than what you have.

    Unfortunately, even if the car is in good shape, many people also find it hard to refinance if their credit score isn’t good. Bad credit makes finding a refinance company hard, and finding good rates even harder.

    FHA Home Loan Refinancing – FHA Refinance, FHA Loans Rates

    #fha loan rates

    Talk to HUD approved FHA mortgage lenders who pride themselves in offering the best FHA mortgage rates online. We provide secure fixed rate FHA loans for refinancing ARM’s into thirty year mortgages with fixed payments that you can afford paying every month.

    Did you know that qualified applicants can get a FHA loan 1 year after bankruptcy, foreclosure or a short sale? You can still find FHA loans for bad credit if you have compensating factors that can be documented to a Direct Endorsed Underwriter.

    In most states, FHA loan limits have remained aggressive with higher loan amounts that enable borrowers to finance homes with only 3.5% down. With higher FHA limits and flexible FHA requirements more borrowers can refinance their 1st and 2nd mortgage into a new affordable FHA loan insured by the federal government.

    Check out the latest updates for FHA loan products. FHA Loan Amounts. This website can help you find mortgage companies that specialize in FHA house loans with best rates in your region.

    HARP Refinancing

    #hfc loans

    Now May Be The Time For A More Affordable Mortgage Loan

    What is HARP?

    In April of 2009, the Home Affordable Refinance Program (HARP) was launched by the federal government with the purpose of assisting low-equity homeowners to take advantage of more favorable mortgage rates.

    HARP Eligibility*

    The redesigned HARP guidelines are as follows:

    • There is no maximum loan-to-value (LTV). You may qualify even if you owe more than the value of your home.
    • Applicant must be current on existing mortgage at the time of refinance with good payment history in the last 12 months.
    • Available for primary residence, second homes and investment properties.
    • No minimum credit score requirements.
    • Mortgage must have been sold to Fannie Mae or Freddie Mac on or before May 31, 2009. Note: your loan may have been sold even if your servicer has remained the same.
    • Program available through December 31, 2015.

    Ready to apply and find out if you qualify?

    Don’t qualify for HARP?

    Beneficial Bank may still be able to help you refinance your mortgage. Click here for more information about Beneficial mortgages.

    *Other requirements will apply. Some may not qualify if you owe more than the value of your home. Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance Program (HARP) and you may be eligible to take advantage of these changes. If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites: or For additional details on the HARP program, you can visit the government website.

    **Please note: The use of non-secure e-mail is intended for general questions, inquiries and comments only. Confidential Customer information cannot be accepted electronically.

    Home Loans with Bad Credit – Refinancing for People with Poor Credit

    #loan for bad credit

    Compare Poor Credit Home Loan Offers without pressure.

    Apply in 30 seconds with one quick, easy form

    Check rates on home mortgage loans with bad credit and get loan analysis at no charge.

    In a recent report, Clear Capital issued its Home Data Index that includes sales data through June. The report through June 2013 underscored new trends that suggest the overall housing recovery is more substantial than previously thought of.

    Home Loans with Bad Credit

    Nationwide Home Mortgage Loan Refinancing for People with Poor Credit Scores and Limited Trade lines

    Did you know that nearly 40% of consumers in the U.S. have experienced a financial setback in the last few years that has caused their credit score to suffer? The demand for bad credit home mortgage programs has surged since the recession resurfaced. According to, the average credit score dropped nearly 50% in the last 48 months? With more and more people needing a bad credit home loan it has helped make the rates more competitive. Even the Federal Housing Administration is approving bad credit home loans on applicants with fico scores greater than 500.

    JCF Lending Group – Mobile Home Loans – Manufactured Home Financing – Mobile Home Refinancing

    #loan companies


    В JCF Lending Group provides mobile home loans, for both financing and refinancing. Founded in 1994 for the sole purpose of providing mobile home loans for consumers that live in or want to purchase a manufactured home. We have limited our business to customers who reside in mobile home parks or communities or on family, leased, rented or owned land. JCF offers mobile home financing and manufactured home refinancing to customers with good to excellent credit.В

    Our specialty is a Chattel Mortgage , which refers to a mobile or manufactured home loan, where only the home will be financed.В We can help with purchase or refinance, but only when the land is not invloved in the transaction.

    В JCF is able to offer our manufactured home customers who wish to refinance their current loan some of the lowest mobile home loan rates in the nation. We also offer mobile home financing to qualified consumers who wish to purchase a mobile or manufactured home with as little as 5% down. Our qualified staff, with over 30 years of experience in the manufactured home industry will walk you through every step of the mobile home loan process.В


    All of our manufactured and mobile home loan programs come with No Pre-Payment Penalties, No Application Fees, and manufactured home loan terms from 7 to 25 years. We are also proud to offer some of the lowest mobile home rates and fee combination available. JCF will provide you with a credit decision, usually within 24 hours of your mobile home loan application, whether it is a manufactured home purchase, or mobile home refinance. В We will also offer you up to 8 different manufactured home loan scenarios to chose from.

    JCF is open from 7:00 a.m. – 7:00 p.m. Pacific Standard Time, Monday through Friday, and Saturdays from 8:00 a.m. – 3:00 p.m. В You can reach us toll free at (866) 967-0143.


    Need mobile home financing – Whether you are considering buying a used mobile home or buying a new manufactured Home, JCF Lending Group will find a mobile home mortgage that’s right for you. The type of mobile home financing loan received depends of several different factors, the year of the mobile home and current value is a strong factor, as is the credit of the applicant and the monthly Income. When you think of mobile home financing, think JCF.

    Once the mobile home financing loan is approved, the amount of the down payment determines the interest rate offered. As an example, a 10 or 20 percent down will offer a better rate than 5 Percent Down. Our terms vary from 7 years to 25 years, depending on the loan program you choose. The best manufactured home financing rate can normally be obtained in most cases with at a 10 year term. It is important to remember that the shorter the term. the less interest you will pay in the long run.


    Need manufactured home refinancing – By adjusting your current Interest Rate and the number of remaining loan payments, many things can be accomplished. Savings can be great and long term savings even better. Reduced monthly payments and thousands of dollars of savings are a few of the possible benefits of mobile home refinancing or that low rate manufactured home loan.

    If the manufactured home is in good condition and there is a sufficient amount of equity in your home, additional options such as an equity cash-out and debt consolidation manufactured home mortgage can be an option. Our Staff will quickly ascertain whether manufactured home refinance will be beneficial. Our goal is to make sure each and every customer is offered the right mobile home finance option.

    Q:What Credit Score is Needed for a Manufactured Home Mortgage Loan?

    A: JCF Lending Group is an A paper loan provider and we require good to excellent credit. Currently, our minimum mortgage ccore for purchase financing is 660, for both purchase and a mortgage score of 680 for refinance. We will look at lesser scores on a case by case basis. In all situations, you must have a minimum of 4 years credit history.

    Q: I Have Bad Credit. Can I use a Cosigner with JCF Lending Group?

    A: No. Every applicant must meet our credit criteria. We would caution potential consumers looking for this solution, as most upscale mobile home parks and leased lot communities will not grant approval for residency for consumers with a poor credit history. Normally, all occupants over the age of 18 that plan to live in a mobile home park or leased lot manufactured home community, must pass both a credit and criminal background check.

    Q: Does JCF Offer Land Manufactured Home Financing?

    Q: My Mobile Home is in a Park and/or on leased land, Can You Help?

    A: Yes. JCF specializes in this type of manufactured home financing and/or loans. In fact, this is what the name of our URL ( means, a loan for a home not attached to property by way of deed or title. We offer the lowest rate fee combination Nationwide.

    4 Things to Think About When Refinancing Student Loans – US News

    #student loan refinance

    4 Things to Think About When Refinancing Student Loans

    The lure of lower interest rates is just part of the picture.

    ​If you want to take out a student loan. you need to sign a promissory note. This is essentially a contract. By signing it, you promise to repay the amount you owe plus interest, among other terms and conditions.

    Students often sign their promissory notes without thinking too much about this promise. Of course, when they go from borrowing that money to actually repaying it. their point of view often shifts. Their goal becomes changing the previously agreed-to terms, especially that interest rate increasing the amount they owe.

    Seemingly, the most straightforward way to do this is refinancing the loan at a lower interest rate. A lower rate means less interest, which sounds great. However, it’s far from the only consideration when refinancing. Here are four others to know.

    1. There is no federal refinancing. Congress sets the interest rate for federal student loans, and most of these rates are fixed by law, no matter how solid your credit or income becomes postgraduation.

    You may be able to refinance your federal student loans into a private loan. The same goes for refinancing a private loan into a new private loan, too. However, you cannot refinance federal or private student loans into a federal loan.

    Some legislators have proposed making this an option. but it does not currently exist. You may think you’re doing this by consolidating your federal student loans, but that’s not the case.

    2. Consolidation and refinancing are different. Many borrowers think consolidating their loans will lower their interest rate the same way that refinancing would. This confusion is common because these options are similar: Both replace your old loans with a new loan with new terms. However, a federal loan consolidation won’t lower your interest rate, even if it seems like it did.

    Federal consolidation loan interest rates are the weighted average of the interest rates of their underlying loans, rounded up to the nearest one-eighth of a percent. The result is a rate that may be likely lower for some of your previous loans, while also being higher for others. In short, the weighted average means that things mostly just balance out.

    Consolidation has its benefits. For instance, you can choose the servicer you wish to work with, as well as potentially qualify for additional repayment and forgiveness options. But you won’t get a lower interest rate.

    3. Refinancing will change your loan’s terms. When you refinance a loan, your interest rate may decrease, depending in part on your credit score or whether you have a cosigner. That drop is the large font headline for choosing this option. However, other changes are in the fine print.

    As mentioned above, a refinanced loan is a new loan, with new terms and new conditions. That means your new, low interest rate could increase. It also means your old loans go away. And the latter is important with federal student loans.

    Federal student loans come with protections that can help you if you’re struggling with your payments. You may be able to use repayment plans that decrease these amounts or put them on pause altogether.

    You also may qualify to have loans forgiven under certain criteria. Most private loans do not offer options like these, and once you replace your federal loans with a private loan, you cannot move or consolidate the loan back into a federal loan to get these benefits.

    Postponements and forgiveness may not seem as important as slicing your interest rate, but take the long view. Calculate how much you’ll save with a lower interest rate. Is it hundreds or even thousands?

    Next, consider how much those protections are worth to you, not only right now but also if you lost your job or faced a different financial emergency. Think about if you would you sell them for the amount you’ll save or whether you have a large emergency fund saved. Your answer can help you figure out if refinancing is right for you.

    4. There are other ways to reduce interest. If you have federal student loans and want to keep their protections, you may have options other than refinancing to lower your interest rates, so explore those first. Many servicers will reduce your rate if you enroll in automatic payments.

    They also may do the same if you make a set number of on-time payments in a row. Call your servicer, and ask it they offer these benefits or others.

    In addition, consider paying extra every month. There is no penalty for prepayment with federal student loans, and paying off your loans faster can reduce the amount of interest you pay overall, even if your rate stays the same.

    Ultimately, these reductions may not subtract as much from your monthly payments as refinancing would. Still, add these benefits to those from keeping your loans in the federal student loan program. The result may end up making more sense for you overall.

    Corrected on 04.05.2015: An earlier version of this post incorrectly listed the author.

    Wisconsin Mobile Home Loans – Mobile Home Financing – Manufactured Home Refinancing WI

    #mobile home loans


    JCF Lending Group was founded in 1994 with the sole purpose of providing Wisconsin Mobile Home loans. JCF Specializes in Chattel Mortgages, a term used when referring to a loan on a Mobile or Manufactured Home where the land is not a factor and only the Mobile Home will be financed. JCF is a home only lender and proud of it. From Superior to Fennimore, to the Capital of Madison, JCF is here for you. Providing the best rate term mobile home financing available today. When you thing of the Badger State, think JCF Lending Group.

    The majority of our customers live in Wisconsin’s better mobile home parks or in leased lot communities. You may also qualify for an Wisconsin JCF Lending Group or Wisconsin Mobile Home Loan if your home and land are not tied together by deed or title. An example of this would be if you own your land outright, or if your home is on family or friend’s land.


    We are able to offer the lowest Wisconsin mobile home loan rates possible along with a Variety of Wisconsin Mobile Home Loan Programs to meet the needs of the entire State of Wisconsin. We will easily guide you through the loan process, providing you with whatever level of service you require. We offer Fixed Rate financing, No Pre-Payment Penalties, No Application Fees and we are Proud to be an Equal Housing Lender.

    We will provide the quickest Approval possible, sometimes within 15 minutes and let you know exactly the manufactured or mobile home loan we can offer. Then it’s up to you to make the decision. We are open from 7:00 AM – 7:00 PM PST, Monday thru Friday, and on Saturdays 8:00 AM – 3:00 PM PST. You can reach us toll free at (866) 967-0143. We also have “Live Help ” operators standing by 24/7. helping both existing and new customers get the answers to the questions they may have, all in real time. No waiting on email.


    Need Wisconsin Mobile Home Financing – Whether you are considering buying a Used Mobile Home or buying a New Manufactured Home, JCF Lending Group will find a mobile home loan that’s right for you. The type of Mobile Home loan received depends of several different factors. The Year of the Mobile Home and Current Value is a strong factor as is the Credit of the Applicant and the Monthly Income. We are also pleased to offer a free mobile purchase agreement along with Wisconsin State Titling Forms.

    Once your Wisconsin Mobile Home loan is Approved, the amount of the Down payment determines the Interest Rate offered. As an example, a 10 or 20 Percent Down will offer a Better Rate than 5 Percent Down. Our terms vary from 7 years to 25 years, depending on the program you choose. The best Wisconsin manufactured home financing rate can be obtained in most cases at a 15 year term.


    Need Wisconsin Manufactured Home Refinancing – By adjusting your current Interest Rate and the number of remaining loan payments, many things can be accomplished. Savings can be Great and long term savings even better. Reduced Monthly Payments and Thousands of Dollars of Savings are a few of the possible benefits of Manufactured Home Refinancing.

    If the Wisconsin Manufactured Home is in good condition and there is a sufficient amount of Equity in your home, additional programs such as an Equity Cash-Out and Debt Consolidation can be an option. Our Staff will quickly ascertain whether Wisconsin Mobile Home Refinancing will be beneficial.


    Headquartered in Las Vegas, Nevada, JCF Lending Group specializes in the financing and refinancing of mobile, modular and manufactured home mortgages in all counties throughout the State of Wisconsin. JCF is recognized as the first lender and/or originator to provide refinance loans for manufactured home owners living in mobile home parks and leased lot manufactured home communities in the Western United States. Prior to JCF, manufactured and potential mobile home owners could only rely on Two major sources of purchase financing, Green Tree and Security Pacific Bank, both high rate lenders treating mobile manufactured homes as high risk investments.

    JCF is a unique lender in that we only finance the manufactured, mobile, or modular home, not the land it sits on. The majority of our customers live in mobile home parks and leased lot manufactured home communities. We also provide financing to homeowners living in a manufactured home where the home is on leased, rented, family or owned land, where the home is considered personal property, not deeded to the land which is real property.

    JCF is also proud to offer our Star One Program, which means that a consumer can apply with JCF, be approved or declined and have their certified credit report sent either by fax or email to any other lender free of charge, keeping a consumers score from dropping due to excess inquires. Another aspect of this program is our low rate guarantee, we will match or beat any other lenders written offer on a comparable finance product. Finally, in the event that we are unable to assist an applicant, JCF will do the research to find out who can meet the customer(s) needs. Powerful reasons for both consumers and employees to put their trust in JCF lending Group, an Equal Opportunity Employer and Lender.

    You can also view state specific links below;

    Want a $15, 000 home loan (fixed rate, interest, heloc, credit) – Mortgages -Lenders, loans, financing, rates, foreclosures, short-sales, brokers, credit score, deed, lien, refinancing, borrowers – City-Data Forum

    #15000 loan

    Most retail lenders or mortgage brokerages unfortunately will not be interested in this type of loan, simply because they will not make any money on it.

    You will have the best luck purchasing this home in one of two ways. First you can go with the secured mortgage loan route, or try a secured personal loan. The second way would be an unsecured loan.

    This is all dependant on your credit of course. You will definitely have the most luck with banks, and I would recommend starting with your own personal bank. I would ask for a general loan officer, and talk to them about what they feel is best. I’m guessing a secured personal loan may be what they choose, because of the significantly low loan amount for a home. They however may be forced to go the mortgage route, at which point you may need a 5% downpayment. Most banks won’t lend 100% on a 2nd home, but they will definitely lend more on a 2nd home than an investment home.

    If you can not find a lender to do this loan, you can also consider doing a fixed rate 2nd mortgage, or a Home Equity line of credit on your current home. If possible, do the fixed rate 2nd as the rate will be lower, and you already know how much you need and plan to spend.

    However, if you’re doing a mortgage, a HELOC (home equity line of credit) may not be a bad idea for this reason. You may be able to get a much larger credit line than the $15,000 you need. The benefit to this is that you have access to money, just in case you need it. You only pay on what you borrow. As long as you’re not an addicted home shopping network person, this can be a very beneficial safety valve to have.

    The main differences between a fixed rate 2nd and a HELOC are as follows. A fixed rate 2nd almost always has a lower rate, and the interest rate will not adjust. A HELOC tends to have a higher rate, and your interest rate can adjust monthly (based on the prime index, currently at 8.25%). You can only get your initial draw on a fixed rate 2nd, and you would need to refinance it to get more money in the future. A HELOC you can draw and repay as many times as you want, up to your max credit limit of the line throughout the draw period. This is typically either 5 or 10 years.

    Hope this helps. please mention any other questions should you have them.

    (btw, you do know how cold it is in the Winter in ND right? I grew up in Montana, so I’m familiar with the harsh winters )