Tryin to Refi

[Mel]

Have 2 collections dated Sept/Oct 02 these are charge offs. About $4000. One late pay (60 days) on current mortgage. 9/02. Broker wants me to borrow enough to pay C/O and add to mortgage. If I wait til Mid Sept to refi will that help? Maybe first Oct? I know rates are going back up but if I wait thought I may do better cause I only want to borrow the least amount possible. I have *B* Credit. Numbers upper 500s
If I am gonna get extra $$ I want to pay my current credit cards.. What do you think? I have balloon due next June. So I gotta do this sometime. I just don't have alot of mixed credit. 3 credit cards/house/truck loan with a few months left. Cards are close to maxed. Also thought if I wait my cards will be paid down and my debt will be better. I have conventional now been reading about FHA. Just want to get some input from those of you that know this stuff!! Thankx

[firstsource]

I would surely wait until September to re-finance. the rates go down a lot when you are 12 months past a late mortgage payment.

Rates have not gone up yet for sub-prime, because they are based on an index like LIBOR, which has not gone up much, plus the profit margin. LIBOR is now less than 1.2. It is sort of like our overnight fed funds, but it is the English version.

I vote against borrowing against your home, for 30 years, to pay credit cards bills. We lenders like it, because the more you borrow, the more we make, but I dont think it is logical. (I also don't think it is wise to pay off cars etc, for the same reason. It will be hard to drive the car 30 years from now, but you will still be making payments on it, if you took re-fi money to pay it off.)

If your mortgage payments are current, you should be able to borrow 80-85% of the value of your home, with a 500 FICO score. If this is not enought, then if you will pay down your credit cards-not have them "maxed out", by June of next year you can be in the 580/600's and get the amount you need.

Charles

[Mel]

Thank you very much!!