Desperately Need help/advice with refinancing my 2 New York Homes

[Anna Dyal]

Hey I am in desperate need for some advice/getting pointed in the right direction for refinancing my Single Family House(Located in Queens NY) and 2 Family house ( Also located in Queens ,NY)

My situation is a  bit complex. I will try to give you a clear picture. 

During the pandemic I was injured at my job and been out of work for 2 Years. I was getting paid $3000 per month via Workers comp plus my job still paid me for Holidays since I am still employed so I have those holiday paystubs and W2 from that. I will be returning to work full time next week.

I want to cash out refinance my homes, that is my end goal. But I have quite a bit of debt from my my surgeries etc and personal credit cards etc. I would say it's about $80k. My credit score is about: 565. 

Here is my house Information 

■ Single Family House is worth about $700k (or more) I bought it in 2019 for $521k I had put down 20% so about 105k. During the pandemic I was on a forbearance plan. I was apporved for NY Homeowner fund but they did not release the funds as yet. So this Single family home is now delinquent and i havent paid anything on it since my forbearance ended I was not working but i am returning in a week as i meantioned. Right now the morgage balance of that is about 480k. 

■ I recently started to rent out part of the Single Family House as an STR( Airbnb) for about 2 months now and I have been averaging about $1500 per month but that is because it's been a bit slow.

■ My 2 Family House I had claimed on my taxes as a rental for the past few years. My mother is also on the mortgage with me for both houses. During the pandemic my mother has been living on one of the floor there. I average about $2800 rent per month from that house. The house is worth about 800k or more. Remaining mortgage is about $290k. 

I have a Heloc on this 2 family house And remaining is $ 113k. ( I used this HELOC as a downpayment for my Single Family House. I had this house on a forbearance during the pandemic also but my paments is up to date for this house and also the HELOC.

■ I was waiting to get the NY state Home fund but its just taking forever and I need the cash now. I would love to consolidate my debts so i want to cash out  starting with my Single Family home but my credit is so bad. I feed so hopeless right now. 

What advice can you guys give me? Any lenders who will work with me right now? I don't know how to proceed. Do I wait to refinance? Slowly keep paying my debts down until my scores get better? Wait for my tax refund to pay down a bit more debts? My credit payments are so large they are drowning me.  Would an asset base  or hard money lender help? How would you get your self out of this? All my cash is tied up in these houses and I feel so stuck. 😩

Also I forgot to add - from my job I make about $35 an hour plus tips (35-40 hours per week)

Please point me in the right direction, any advice is appreciated. Thanks in advance 😊

[Caroline Gerardo]

Forbearance may restrict you from any CASH OUT government backed loan. It appears a better than a short sale.  You need to have a payroll check to refinance. Can you show you have made past 24 months mortgages as agreed? You provide mortgage bill, past payments, forbearance agreement, and amount added on the back end. That back end amount gets paid with any refinance you might find. Do you know how much the payoff is?

I'm not licensed in NY but can give you a name of someone who could advise what rate might be available.

With your score you can get a loan but you will find the rate is VERY high.

Some NY state funds also limit you from cash out - read what you signed. Don't trip yourself there.

Lenders will not use the STR as it doesn't show on past two years IRS taxes, it's only a couple months. Be careful that you applied for funds if you didn't report this new income.

Hard money won't lend on primary residence.

Here are my solutions:

Start negotiating with hospital, physicians, medical bills for hardship relief- daily and in writing. Get the medical off your shoulders.

Get back to work. Be careful with your health and get better.

Don't get a hard money loan on the duplex it will only make your financial problems worse. Bumping the payment up short term is not a good plan.

Pay the highest credit card extra payments and everyone else on time. Get cards to under 69% of the available line.

Don't close accounts. DO NOT let anyone to pull your credit (can happen when you shop for insurance or any time you give someone your social and date of birth).

Move in with Mom to save more money. You need money in your checking account.

You say you don't want to sell and desire to buy more properties. Selling one property would solve the current stress. What can you and Mom make create sell on the side?

Do not withdraw 401k. Use tax refund to pay credit cards not the medical. Watch tax bills from programs.

I will keep you in my prayers.