A friend of mine needs a loan for about 100K for less than year. The condo is worth approx. $500K. Los Angeles area. FICO close to 780.

He was on a 3/1Arm which expired, and now the rates are up. His interest was 5%. I don't know how much is now.

Can somebdy give a good advice? He plans to sell it next year and needs it for a short time.

Thank you!
st123

Hi ST,

Send him here:

removed .

I'll see if I can help him out.

Dan

First off, see what the rate will be. It will be on his note. Find out what the margin is and what the index is. Also look at that the rate cap will be (maximum). If he is going to hold the property for only one more year there will have to be a heck of a bump in rate compared to what they will refinance in now in order to make a refinance a tangible benefit. You have to consider closing costs in the transaction. Let's say they are $4K. over 12 months that equals $333. Make sure he takes that into consideration.

I bet it is 1% cap 1st adjustment or 2%.. At any rate if they are selling in a year I really see no benefit to refinancing now except to extend a safety net in case the home does not sell.

But, only if rate and term. If they need some cash or want to pay off bills that is another situation.

Hi St,

I can do a second for 100K if he is selling in a year and not refinance his first lien.

Brian Siegel
Premier Mortgage Funding, Inc.
866-775-9400

High Brian,

How much the % would be and how much it would cost him?
Thanks
st123

Hi St,
a 100k second seems the best bet with the little info you have provided. you can send him here if you like.

If his first interest rate isn't bumped an Insane amount, and all he wants is a little cash out, he can do a second mortgage for no upfront costs, (the bank will pay them) Only downside is that when he sells in a year he will have to pay the costs the bank paid (<$1000 depending what state he's in.)

Not hard.

I can get him a straight 30 year fix at 6%. If he wants to use the equity to buy down his rate. I can probably get down to 5.25. May cost him 4-6% but thats his choice. Anyways the refi can get done in under 14 days if he wants it. Email Im located in Sacramento and the rates are available for CA, AZ, WA, NV only. I am doing a refi in Woodland Hills on a guy who cashing out free/clear to purchase more. Yea while people keep trying to get YSP its a better to tell them to buy down the rate. Just my opinion.

Good luck and questions email me.

Buying down the rate would be an option if he planned on keeping his home for 10 years or more but that's not the case: he plans on selling within a year. Charging him 4-6% to buy down his rate---I see it as wasted hard earned money that he will never recoup. Where's the benefit in that???
Would you give him a 3-yr prepay too?! Come on now...

The second lien with lender paid closing costs sounds better and better doesn't it?