June 27, 2011 9:46 PM Subscribe
Should I attempt a mortgage refinance after long unemployment and only very infrequent freelance jobs or is this opening a big can o' worms?
posted by anonymous to home & garden (5 answers total)
I've been mostly unemployed since Dec. of 2008, and only in the past six month have I been able to make a small income doing freelance work (very small, like, around 5-6K so far for the year). However, through unemployment compensation, and savings, I've managed to stay current with all my bills, and have an 'excellent' credit rating.
My wife has a very stable and well paying long time career. We live in a co-op in NYC that I own in my name only, and it's worth at least double what the current mortgage is on the place. Recently my Bank mortgage rep has been calling and offering to reduce my interest rate to like 4.5% (it's currently ~6.5%) for a 30 year-fixed mortgage. This is tempting both for the reduction in monthly payments, and the opportunity to take a little more equity out to pay off some credit card debt I've accumulated and also give me a little more cushion.
This would be a second re-finance, and I figure my wife would have to go on the loan this time around given my current income.
But is this all opening a big can of worms? This would be the first my bank would be learning of my current fiscal condition. (which sucks, but our overall household income is fine).
My worry is that not only would they refuse the refinance, but the information would be used to damage my excellent credit...
What do you think? Should we go for it, or stay away? (I also have a couple of credit cards with the same bank, but they are always paid in full). Also, if it matters, we've been in the place for 12 years, and expect to be here at least another 3. And we've never been late on mortgage or maintenance bills.
The last refinance I did was very smooth, barely any paperwork, but that was 'pre-crash' and I assume the bank would now be doing a bit more due diligence into my money situation.
1.My wife also has a mortgage in her name for her mother's co-op. She's never been late, and held that mortgage for about 12 years, and re-financed once on it. It's also worth at least twice what her remaining mortgage is.
2. Also, other than some credit card debt in my name, we have no other debt, no car, no kids.
3. The bank making the offer is one of NYC's major banks.
Normally, I wouldn't have even considered the offer to refinance, but the rates seem so low...