How much equity do I need to refinance my house?

Question

We've only been in it for 1 year so don't have much equity. We paid 189,000 for it - how much do we need?

Answer 1

You will need to have at least 5% FOR MOST LENDERS WHO ARE NOT ALREADY YOUR LENDER.

When a lender is already at risk, they will often start with zero equity. But by that I mean, they will take the price they could sell the property for now, and the new mortgage must be at most that much, in theory.

But given that they will lose by selling the home for less than the mortgage, they may agree to renew the mortgage without insisting you have any equity. It is a way to sell the house to you for a price above what it is currently  worth.

Answer 2

depends on your market.  for my credit union they would not go over 90% Loan-To-Value (LTV) in the Washington DC market.  In other markets (non major-metropolitan) they wouldn't go over 85% LTV.

so, depending on what it appraises for, lets say 189000 you couldn't go over $160650 with 85% LTV.

Answer 3

If you have a FHA loan, you can do a streamline refinance without an appraisal and income verification.  However, you have to be up to date with your mortgage payments.  No 30, 60 or 90 day lates.

FHA will do cash-out refinances up to 95% loan to value.  A cash out refinance will require an appraisal and income verification.

Conforming loans will limit you to 90% loan to value.  This will depend on where you live and type of property.

Answer 4

This will depend on your lender guidelines.  Contact a mortgage broker or banker for detailed information on your specific situation.  Good luck!