Home Equity Loan

[MotherOf5]

Hello Everyone,

My Mother-In-Law wants to take out a home equity loan for $200000. Her house appraised for $600000. She owes nothing on the house. The only question I have is that she is 80 years old and my sister in law is co-signing. Should there be a problem with the age in getting the loan?

[Andrew]

Is their a particular reason why your mother-in-law wants to take out an equity loan at 80?

[MotherOf5]

She wants to help my husband and I lower our mortgage so we can get a fha loan.

[Andrew]

Poppy, may know more on this topic. They have reverse mortgages out there. But not sure on the age limit. I think her age may be a factor with the underwriter, in an equity loan.

[MotherOf5]

Will a 30 year fixed rate mortgage be better?

Heck yes, 30 year fixed rate, HELOC goes up, up and up....fast to get, easy to abuse.....

Get a 30 year fixed rate loan, up hill down hill same payment for Principle and Interest, not so for the doggoned HELOC or HELOAN. Rotten product for anyone....ROTTEN.

Now age is not a consideration it is known as, discrimination if we take that into consideration....very big discrimination, and big trouble with the regulators...

Take the time and apply for the 30 year fixed rate full document loan and DO NOT USE A BROKER...please go to the credit union or her bank for this process, direct lender that will not abuse the fees and charges that are the Brokers reason for existence to make their house payment and grocery bill off you loan for the next 3 months.....off one piddly little loan.

If you have a Credit Union that is near by, the bank that your Mother has done business with for umpteen million years...USE THEM, PLEASE.

The rate should not be any more than 6.50% or 6.75% or lower this market...

[MotherOf5]

Thanks Poppy. They are going to the bank on Wed. So I will know more then. She is going to the bank where she has had an account for the past 40 years.

Now before she signs on the dotted line, and goes into mortgage debt, have you gotten a credit review, i.e. applied to see if you would be approved for an FHASecure loan with the ability to put the money down to get to the loan amount that you need. The delinquency on you present mortgage if it is delinquent prior to adjustment will affect/effect that possibility. You should see if you qualify ahead of getting money in the event that it is not viable yet.

Please do not use a broker, use a Credit Union, Bank or Direct Mortgage Banker, like Flagstar, GMAC or Chase. They all are direct lenders, the best is a Credit Union they do wonders for their members if they are FHA approved. The only FHA product with the delinquency that you could consider would be FHA Secure, however you must have the 6 months prior to your adjustment rated 0X30, otherwise they can not do it. I am not sure how they are treating loans that are seriously delinquent in the FHA Secure program when they are submitted, the ones that I have looked at are 3 months max and we just move them on through if the DTI and consumer credit is in line with FHA guidelines on those issues.

So, I would recommend that you see if you can prequalify on the credit side before having the mortgage made to you mother in law...ahead of time on your loan.

[dianneleesz]

Yes, age is important in obtaining the loans.

[Moe Bedard]

Dianneleesz,


It is a violation to discriminate against someone for mortgage purposes for age if they have the capacity to apply for the loan......
So this members mother in law is well within her rights to get an equity loan on her house......

Mortgage DiscriminationThe Equal Credit Opportunity Act (ECOA) and the Fair Housing Act (FHA) protect you against discrimination when you apply for a mortgage to purchase, refinance, or make home improvements.

Your Rights Under ECOA
The ECOA prohibits discrimination in any aspect of a credit transaction based on:
race or color;
religion;
national origin;
sex;
marital status;
age (provided the applicant has the capacity to contract);
the applicant’s receipt of income derived from any public assistance program; and
the applicant’s exercise, in good faith, of any right under the Consumer Credit Protection Act, the umbrella statute that includes ECOA.

[mreedlaw]

Please let us know how it goes today with the visit to the bank/credit union, b/c from reading the comments posted on this thread, it would not hurt to see if you can prequalify at the bank (as Poppy said) and also possibly just get an interest rate quote for your mother (with her age not being as much a factor, like *** said) -just make sure you have your bases covered...thanks, Michael

[MotherOf5]

I will let you know. I have been pre-approved. The interest rate for my mortgage will be 5.75. That is with buying a point. My payments will go from 5540 a month down to 2700 a month. I need for everyone to cross their fingers that this works. I have been a bundle of nerves the past few days and all I am doing is crying. Again I will post later after I hear what the verdict will be.

[mreedlaw]

Glad to hear you had a pre-approval...don't cry, take a deep breath and keep on going...just let us know how you are doing, okay? Thanks, Michael

Do not cry...NO, NO...you are in great shape now.....so breath, take a deep one and get the process under way that you need to.

Were did the pre-qualification come from? I hope the Credit Union...

Please let me know and have your mother-in-law now go for the 30 year fixed rate mortgage, trick go to the same place...Credit Union and that way the transactions will be real smooth dominoes when they close together......

That is always recommended on the transactions that are back to back and reliant on one another for funds or closing on one first and then the second one after wards....