Can I refinance?

Guest 0.10 Dollars($)

I have a 2year ARM that is going to adjust in Jan 2008. I called my lender and they told me that the rate is going up aprox. 3% so that can bring my interest rate up to about 9-10%. I absolutely cannot afford that increase, so they told me they would send me a hardship package.

I wanted to know if I could refinance and they basically told me I need three things: 1. Working 2. Equity in the home 3. Good Credit. We work and we have good credit, but because of the market my home has lost value. So they told me I probably wouldn't be able to refinance.

I got to thinking and the loan that I have is a 80/20 loan and the only one we need to refinance is the 80 loan which is for about 330,000. I purchased the home for 416,000 and the value of it now is probably around 375,000-400,000.

So my question is, would I be able to refinance the 1st mortgage (80) since it isn't more than the value of my home.

I hope I haven't confused you. I really need some advice because I want to avoid a forclosure at all costs

Thank you

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

Hi Rew,

Welcome in this forum.

First I would like to say that you have put your question in a very organized manner. So thanks for that Smile

. You work and your credit is good. So I hope you have not yet make any late payments. So there are no questions of foreclosure.

Your interest rate is going to be higher. That is why you are willing for refinance. Ok, you can refinance on your first mortgage and may get a comparatively lower interest rate but for that you need to shop a bit of the mortgage. This community has a lot of registered lenders and I think someone of them will surely help you. You can try to contact them.

Thanks,
Larry

jenkin7 · Joined: 04 Jun 2007 Posts: 939 140.77 Dollars($)

Hello Rew,

I think you will be able to refinance your first mortgage and also avail a lower interest rate if you have a good credit. You may refinance it into a fixed rate mortgage to avoid any further complication.

It will be better if you talk to your lender and consult him.

evolovik26 · Posted: Mon Nov 19, 2007 9:05 am Post subject:

there is some things missing in this scenario but here is what you can try to do. If your credit is good enough and you have enough income to support the payments you can qualify for a 100% rate term refi loan. This means you can Get a loan up to 100% of your current home value. So if what you owe for your home is less then the current appraised value you can get a 100% conforming loan at a decent, fixed rate. You can also attempt to subordinate your second mortgage but if the value is not there i doubt they will do it.
Basically contact a reputable lender as soon as possible so you know what your options are and you can also have your lender check into how much your home will appraise for today.
If you have any more questions contact me or ask in this thread.

scherzeroni · Joined: 05 Jan 2008 Posts: 51 18.77 Dollars($)

Most lenders still require that all liens on the property are less than 100% of the current value. So most lenders will not refinance the first mortgage for this reason. I would see if your lender can temporarily hold your rate for another year or two. There are a lot of lenders doing this. There may have been a bill passed that is requiring them to do so but im not sure if this is in effect or not. I would suggest doing some research on this bill to see if there are any rights that you can take advantage of in this respect.

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