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phinallydone03 · Joined: 02 Jan 2008 Posts: 3 2.45 Dollars($)

I bought this house 3 years ago, and I did 5/1 ARM. I know it will be up by the end of 2009. What should I do? Refinance or sell it? If I refinance, do I need 20% down? What is the best solution. Happy New Year!

larry · Joined: 27 Jun 2007 Posts: 3322 474.67 Dollars($)

Hi phinallydone03,

Welcome to the forum and a very Happy New Year to you.

The market is down. So can you get a good price for your house? If you get good price for it, you can do it. Otherwise I think refinance is a much better option. You may get a lower interest rate also. This is not necessary that you have to refinance from you lender only. You can shop a bit for lenders and may be offered a lower interest rate.

Feel free to ask if you have any further questions.

Best of luck,
Larry

banker0679 · Posted: Wed Jan 02, 2008 1:23 pm Post subject:

there are a lot of things to consider!

what is your current rate?
what is your current LTV (Loan to value)
what is your current credit score.
What is the loan amount.
What city/state are you in. This will help to determine if you're in a declining area.

FHA allows up to 97.75% for rate/term refinancing.
95% for cashout transactions.

If you go conventional/conforming it will vary with your score/ltv/etc

brad · Posted: Thu Jan 03, 2008 7:38 am Post subject:

you have many options! Did you purchase your home @ 100% if so odds are you may owe more than what your home is worth. I have been working with a lot of clients in this situation over the past year. As long as you can verify your income you will have the option of FHA at 97% of the appraised value of your home.

If your property is in a declining market than Lenders are currently take 5% off the allowable amount you can finance. Please let me know if you need any further information.

uptightmortgageguy · Joined: 25 Nov 2007 Posts: 21 Location: WV 8.00 Dollars($)

If you are close on your loan to value, you can pay your principle down in order to to get it in line. It would be a shame to pay that higher payment if you could just pay the note doen a little.

gmakerley · Posted: Thu Jan 03, 2008 2:10 pm Post subject:

i have to leave this one alone - too many others have already responded.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

No you dont need 20% down. You should be able to do a refinance with no out of pocket expense just depending on what your home appraises for. Interest rates are very good right now on a 30 year mortgage. Right around 5.50 to 5.75 so I think it is an excellent time to refinance. The likely hood of the interest rates being higher at the time of your mortgage adjusting is likely. Basically because there is more room for them to go up than to go down from here. If you are looking to stay in your home long term (more than 5 years) then I would definately look into refinancing now.

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.12 Dollars($)

Just want to give you these tips so that if you decide to refinance that you get the best possible loan. Don't make the mistakes below.

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