Small mortgage refi problems

3 Replies

Not sure what section to put this in. 

Anyways, I have 37,000 left owed on my 10acres and home, which just appraised at 83,000. My interest rate is 6% adjustable to 14%. I would like to refinance the 37,000 with a fixed interest rate, and also get a lower payment, which would make some room for some other investment ideas I have going on. But it seems nobody wants to refinance this amount.  As soon as you say 37, they immediately are  uninterested. I have considered pulling all the equity out, refinancing the whole amount, about 64,000, giving me somewhere around 25,000 equity, and putting that towards my other ideas, but in the state of Texas you are not allowed to have Ag Exemptions when you cash out a refi, meaning I would have to cancel my ag exemptions on my acreage, which costs me thousands of dollars and raises my property taxes tremendously. Local banks want 8-10% interest.  Really don't know what to do here. It's holding up a lot of other ideas i'm trying to jump on though. Suggestions?

hrm. That small you could maybe pull a loan off Lending Club?
How many banks have you tried? keep looking at local banks, or banks in lower income housing areas, someones funding cheap houses. keep calling.

It's been a lot of years since I dealt with one of these and the laws could have changed. But I do remember having the house on one acre surveyed out from the rest of the property, then just doing the refi on that. This leaves the rest of the acreage unencumbered and therefore allows for the Ag exemption to remain. You would think that losing that much of the land in what the lender is lending on would kill the deal but you would be shocked how little value the extra, unimproved land adds to the price sometimes. Be aware that in some areas, getting the one acre broken out and then surveyed can be an pain in the rear, time consuming and sometimes expensive. But it may be your only option. Most banks won't refi below $50k and in some cases not below $100k. Try a local bank. A lot of the nationwide ones don't really understand Texas Cashout Rules. They might tell you they can do it and then the whole thing falls apart when the title company looks at it.

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