Refinancing to remove a co-buyer; how to keep loan ratio down?
1 Reply
Karli F.
Rental Property Investor from Saint Paul, MN
posted almost 2 years ago
I need to refinance a house to remove a co buyer but I don't want to have a new 100% loan for the balance owed on my credit. Does it make sense to refinance for 20K more than amount owed, then applying those funds to the new mortgage? For example, amount owed is 195K; new loan would be 215K with 20K out, but the 20K would be paid back to the loan.
Shaun Weekes
Loan Officer / Processor / Life & Health Agent from Valencia, CA
replied almost 2 years ago
Originally posted by @Karli F. :I need to refinance a house to remove a co buyer but I don't want to have a new 100% loan for the balance owed on my credit. Does it make sense to refinance for 20K more than amount owed, then applying those funds to the new mortgage? For example, amount owed is 195K; new loan would be 215K with 20K out, but the 20K would be paid back to the loan.
Your thought process is really smart but since your mortgage isn't a credit card or revolving debt the 100% balance really won't hurt your credit.