Quote:
Originally Posted by look 171
My first is with BofA. THe balance is 118,000. I am about to refinance my home but I have a line of credit with a smaller bank, Bank of the West. I used all of the funds, 250k for an investment property. I want to shorten my first to 15 years due to the low interest rate. My current home is worth about 650-700k. My question is will BofA force me to cancel my line with Bank of the West so they will control the total amount. The interest with bank of the west is so good that I do not want to have to reply again. I do not want to lose me line of credit. It will all be pay back by march or April this year. It is revolving. My rate is always one point below prime. Bof A want Bant of the West to sign a Subordination requirment. What does that mean? They stay as the 2nd lender?
Jeff
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1) If you are not taking any additional cash out during this refi that should be OK
2) Bank of the West will want to know what the new payments will be if you go to a 15 year note- if the new payments exceed their guidelines they may ask you to shut it down. If that happens, go with a 30 year note and just overpay it monthly- same thing and a slight rate hit.
3)- the suboordination agreement is an agreement that says Bank of the West will step aside and go back into 2nd lien so B of A can retake 1st lien. It's necessary.
Also- my experience is before they shut down the line (usually due to excessive new debt) they will call you and ask you to verify that is what you want to do.
Based on what you're telling me, no they shouldn't cut it off- assuming the new house payments aren't astronomical in relation to your income.
rjp
PS screw B of A they are hideously expensive and painfully slow. If the Bank of the West says they can do it and leave all terms alone, go for it.
Maybe you're HARP eligible. Ask.
rjp