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Re-finance with money out?

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I am trying to wrap my arms around some debt and I am wondering if I have a chance of getting approved for a refinance with cash out? 

Or alternately would it be easier to get a home equity loan?  I would like to help consolidate this and make it more manageable.


Mortgage:  $422,520 Principal (maybe 2 years old)

401k Loan:  $40,100 

Credit Cards:  $92,550 (at approx. 18% interest)

Other:  $27,500 at 0% interest and $500 month payments.

Total debt, excluding mortgage is $160,143


Income is approx. 155k which includes renting out the upstairs apartment.

House is approx. 860k in value.


My 401k value is around 320k and I can take out $87,000 before penalties and taxes.

I have $7,900 in stock bought in July 2017 for $3,171.  


Thank you




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Could you live in what $650k would buy in your market?  If you downsize you could be done with all non-mortgage debt.  

Refinancing just drags out the misery for another 30 years. 

Please stop molesting your retirement accounts. :)  

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Unfortunately selling the house isn't an option for family reasons. 

I could move but don't think the savings would be enough of an offset to make it worthwhile.  :(

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A HELOC/HE loan will almost certainly come at a higher cost (even considering an intro rate that you might be able to get for the first year).


Rough guideline for max DTI on a cash-out refi is 45% of your monthly gross income, depending on credit scores and other factors.   If you haven't been renting out the apartment for 2 years you may not be able to count the rental income.


I haven't done the math to know if you are at risk, but going to max DTI will create payments that will probably require you to cut back in other areas.


DTI would include your NEW mortgage payment (P+I), all other remaining debt payments not paid from the refi proceeds (car payments, etc.), monthly portion of your homeowners insurance and property taxes, and HOA dues (if any).  Add all of those up and divide by your monthly income.

Also, have you fixed the root cause of all of this debt?  Looking at the distribution of your obligations it would appear that this has been building from some time (high-rate credit card debt -> 0% promo rates for other debt -> 401k loan) looks like you've been going backwards for a while.  No judging, just observing. 



Edited by cv91915

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"family reasons" is not a reason. you have too much house and too much debt. and please don't touch your retirement accounts to deal with overspending.


have you checked out the money management forum? there are a lot of threads on how to cut spending.

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