refinance or quit claim?

jomishaylo · Joined: 29 Jan 2008 Posts: 2 1.59 Dollars($)

i owe 360,000,00 the interest rate is 9.850, and my payments are 5,692.67 each month. due to work slowing down, i've been late 6 months. i won't be able to make these payments, so what are my options, my fico score is 515. thank you

larry · Joined: 27 Jun 2007 Posts: 3328 473.40 Dollars($)

Hi Jomishaylo,

Welcome to the forum.

Are you saying that you are 6 months behind in your mortgage payments? If so then have not your lender sent you any default letter yet? Generally lenders send it if you behind in you mortgage payments for 3 or 4 months.

Is it an ARM? The interest rate seems a bit high. So if you can afford and get a better rate and term then you can refinance. But the fact is your credit score is very low. So I don't think you can get a mortgage of such a big amount.

Can you please inform us about your monthly income and DTI ratio?

Best of luck.

sara

Hi Jomishaylo,

Welcome to the forums.

I think yours is a fixed rate loan since your payments are the same every month. Before it's too late, call up your lender and have a talk with him stating your situation. If you can explain clearly how much you can afford, may be he can help you out. It's not that he'll call for a foreclosure; it will cost him too to arrange for it.

The lender can give you a range of options such as an alternative repayment plan or a loan modification. You can even sell your home to pay off the loan. I know it's not perhaps what you want but if you cannot afford, then it's better to sell off the home and stay in a rented property.

Take Care

jomishaylo · Joined: 29 Jan 2008 Posts: 2 1.59 Dollars($)

thank you for your sugestions. i have to do something asap, no work no $, walking away is not a option. there is a solution, i love a good challenge.

jerry · Posted: Fri Feb 01, 2008 11:51 pm Post subject:

Yeah, walking away is indeed no solution. Once you talk to the lender and find a way out, you'll be happy to have moved on and not just sit back regretting.

lisascherzer · Joined: 04 Jan 2008 Posts: 749 0.10 Dollars($)

I suggest calling your mortgage lender and ask for forebearance. This is when the lender will temporarily reduce the payment during hard times.

If you do happen to have substantial equity in the property, a mortgage refinance might be possible. For a refinance, most lenders will not lend more than 70% of home value due to your credit. Many might not lend more than 60% of your home value.

You had mentioned a quit claim. If you have someone that you want to add to title and then refinance it in their name, that could be an option. The lender would then base the loan approval on just their credit and could go as high as 100%, just depending on the credit. With good credit, the rate would be substantially lower than what you have now and would reduce your payments considerably.

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