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Posted in Mortgage
How can you convert a home equity loan into a conventional loan?
We have a HELOC ($54000) and our home loan, which is an adjustalbe rate mortgage at ($233,000). Our home value is between $213,000-$236,000. We want to refinance our home mortgage but were told we could not because of the HELOC. But were also told that if we were able to convert the 2nd into a conventional loan then we would be able to refinance. Any information you can give would be appreciated.

Thank you
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Question By
thatme

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In  many cases these modifications are tough ( many phone calls, documentation, letters etc. ).  I have herd it taking a year in some cases and so hang in there.

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Response by
nandog

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Check around because your a good candidate for a loan modification.  Some mortgage companies or your mortgage holder can help you.  Good Luck.

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Response by
nandog

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If your home was worth ~$359,000, you could refinance and roll your home equity loan into the mortgage. But given your current sitation that will be almost impossible. 

Most first mortgages will only allow for a 80% LTV (loan to value). Since you need a loan of $287K, you need a home value of $359K to make the math work. Since you stated your home value at $236K, you are underwater and current LTV is 121% which is way to high for any lender to touch. 

I wish I had better news for you. 

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Response by
hardeight

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