[Stephen P Schmitt]

Our 1rst mortgage is a 5 yr ARM which will expire in about a year and a half. Our house has increased in value approx. 150 - 200 thousand $s. We bought it for 280 and owe about 195. We owe about 39 on our home equity loan. We want to pay this off, and we are in need of approx 75 thousand more.

Will refinancing our mortgage allow us to achieve this goal?

[ScottGem]

Sounds like it. From what you are saying, your more is valued at more than $400K. You therefore have about $200K in equity. So you should be able to refinance for about $300K and pay off the existing debts and get some additional cash out.

However, I would be cautious here. The Real Estate boom seems to be leveling off if not dropping back a bit. So that 400K may decrease cutting further into your equity.

[Dr D]

Now would probably be a good time to roll out of the ARM , while rates are still very low by historical standards. The rate cap for your first change could be 2%, or 5% depending on the product. Depending on what the appraisal comes in at, be sure to limit the Loan To Value (LTV) at 70%. FNMA charges .5% (1/2)extra discount points for a cash out refinance from 70.01% LTV- 80% LTV and .75% (3/4)extra for 80.01% LTV-90% LTV.