Any better way to get a second mortgage than Discover’s 7.5% loan?
Any better way to get a second mortgage than Discover’s 7.5% loan?
I need to get a second mortgage and of course the rates are pretty high.
I was able to get a quote from Discover for 7.5%. My place is a condo so my current mortgage provider won’t even offer me a second mortgage.
I was able to get a quote from Discover for 7.5%. My place is a condo so my current mortgage provider won’t even offer me a second mortgage.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
Are you looking for a HELOC or a home equity loan? How long do you need the money?
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
To answer your question, DCU is offering 6.63% fixed rate Home Equity Loans: https://www.dcu.org/borrow/mortgage-loa ... loans.html
You can become a member by donating to a charity they support: https://www.dcu.org/membership/member-eligibility.html
Look for the string "You may join this organization when you open your DCU membership" to quickly scroll to the list of eligible charitable organizations.
[Unsolicited Advice]: If this is about buying out your ex, from your other thread titled "Divorce Lien" -- Please reconsider simply selling the home instead of getting into complications.
You can become a member by donating to a charity they support: https://www.dcu.org/membership/member-eligibility.html
Look for the string "You may join this organization when you open your DCU membership" to quickly scroll to the list of eligible charitable organizations.
[Unsolicited Advice]: If this is about buying out your ex, from your other thread titled "Divorce Lien" -- Please reconsider simply selling the home instead of getting into complications.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
SPX box spreads are about 400-425 bps currently.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
You'll need a home equity loan, then. 7.5% sounds about right since it's going to be junior to your primary.
Note that having the secondary loan will complicate refinancing the primary loan, since they'll need to agree to be subordinated.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
That’s good to know but my primary is at 2.35% so I’ll never refinance itexodusNH wrote: ↑Wed May 31, 2023 11:36 amYou'll need a home equity loan, then. 7.5% sounds about right since it's going to be junior to your primary.
Note that having the secondary loan will complicate refinancing the primary loan, since they'll need to agree to be subordinated.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
Yes it is to buy out my ex. My parents were going to lend me the money originally but then they changed their mind.lakpr wrote: ↑Wed May 31, 2023 10:57 am To answer your question, DCU is offering 6.63% fixed rate Home Equity Loans: https://www.dcu.org/borrow/mortgage-loa ... loans.html
You can become a member by donating to a charity they support: https://www.dcu.org/membership/member-eligibility.html
Look for the string "You may join this organization when you open your DCU membership" to quickly scroll to the list of eligible charitable organizations.
[Unsolicited Advice]: If this is about buying out your ex, from your other thread titled "Divorce Lien" -- Please reconsider simply selling the home instead of getting into complications.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
Thanks for sending DCU this. It seems they are for short durations, I would probably need 30 yearslakpr wrote: ↑Wed May 31, 2023 10:57 am To answer your question, DCU is offering 6.63% fixed rate Home Equity Loans: https://www.dcu.org/borrow/mortgage-loa ... loans.html
You can become a member by donating to a charity they support: https://www.dcu.org/membership/member-eligibility.html
Look for the string "You may join this organization when you open your DCU membership" to quickly scroll to the list of eligible charitable organizations.
[Unsolicited Advice]: If this is about buying out your ex, from your other thread titled "Divorce Lien" -- Please reconsider simply selling the home instead of getting into complications.
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
I did some research regarding long term Home Equity Loans, I wasn't able to find anything better than 7.5%. If you do have the offer in hand from Discover, perhaps take it, and then pay it down like crazy. To the extent that I'd even advocate holding off your 401(k) contributions (except to gather full match). That 7.5% you would pay is after-tax, since second mortgages must be used to improve the home in order to be tax deductible, which is not the case here. A 7.5% after-tax return while being in a 24% Federal tax bracket would mean right about 10% before-tax.
Now we are talking stock-market like returns by paying down the HELOC.
Edit: I just read in your past thread that you are in FL, and that your annual income is above $200k. That would put you, as a single, into the 32% tax bracket, therefore the 7.5% after-tax return is equivalent to 11% before tax earning rate. Now my eyes start popping up!
Re: Any better way to get a second mortgage than Discover’s 7.5% loan?
I will actually be able to file as head of household since my son is a full time college student and under 24. But yeah it's nuts.lakpr wrote: ↑Sat Jun 03, 2023 10:36 pmI did some research regarding long term Home Equity Loans, I wasn't able to find anything better than 7.5%. If you do have the offer in hand from Discover, perhaps take it, and then pay it down like crazy. To the extent that I'd even advocate holding off your 401(k) contributions (except to gather full match). That 7.5% you would pay is after-tax, since second mortgages must be used to improve the home in order to be tax deductible, which is not the case here. A 7.5% after-tax return while being in a 24% Federal tax bracket would mean right about 10% before-tax.
Now we are talking stock-market like returns by paying down the HELOC.
Edit: I just read in your past thread that you are in FL, and that your annual income is above $200k. That would put you, as a single, into the 32% tax bracket, therefore the 7.5% after-tax return is equivalent to 11% before tax earning rate. Now my eyes start popping up!