80/20 split first mortgage and need to refinance !!! HELP

psarrubbo · Joined: 26 Aug 2008 Posts: 1 1.54 Dollars($)

We need some HELP !!! We had gotten a first mortgage during the "infamous" lending boom and now we think we are in over our heads.

We had gotten a no doc/no income verification loan with a fixed rate for 80% of the borrowed money and an absurd interest rate of the 20% home equity line of credit that we used for our down payment.

After three years we would like to combine both of these loans into a traditional 30 year. However, we are very afraid that with the extensive mortgage crunch, we will not be able to qualify. We have not been late since having the loan, however our income is has drastically taken a hit due to the economic situation in our midsts.

Any advice you can give would be greatly appreciated. I went with a trusted friend with the first mortgage and feel now that we got burned BIG TIME, so how do you trust someone or reccommened someone that will do right by you?

helping_user · Posted: Tue Aug 26, 2008 11:50 pm Post subject: RE: refinance 80/20 loan

Welcome psarrubbo.

It is good that you have not been late on any of your payments. But are you trying for a second source of income since your income has taken a hit?

Depending upon your credit record, income and home equity, you may qualify for a combined refinance loan equal to the total balance on the 80/20 loan.

You will have to shop with some lenders and find out how what offers they are willing to provide. Also, you may check out whether it's worth going for a combined refinance using the Consolidation and refinance mortgage Calculator .

Thanks.

sara · Posted: Wed Aug 27, 2008 6:28 am Post subject: RE:

Hi psarrubbo,

Welcome to the forums.

I can understand why you're afraid. But I guess it's better to start shopping for a loan, check out some of the offers and try your luck. I don't know how much you owe on both the loans. Depending upon the loan balance to be repaid, you can look out for refinance loans available in the market. You may send in your request for a no-obligation free mortgage quote from the lenders in this community. To know what happens after you request for quotes, refer to the section on Mortgage quote .

Feel free to discuss the loan offers with the community experts and then take the decision.

Take Care

gmakerley · Posted: Fri Sep 05, 2008 10:20 am Post subject:

well, i don't mean to be a naysayer, but i surmise you'll have a great deal of difficulty in renegotiating your loans. inasmuch as your original deal was on a no income verification basis, you may very well have been granted loans greater than what you would have qualified for to begin with.

with a loss of income now, the likelihood of qualifying for an equivalent mortgage in these days of fully-documented loans is quite small. no income loans are, for the most part, a thing of the past.

kathybailey · Joined: 03 Sep 2008 Posts: 2 1.97 Dollars($)

I am sorry you feel like you got "burned" with your trusted friend, but it sounds like he structured your loan in a way that was agreeable to you at the time, so that you could purchase your home with no down payment. You are not alone in this situation- many people have 80/20 mortgages (frequently these second mortgages are lines of credit with adjustable rates and/or are balloon loans, and the rates are higher) but , trying to look on the bright side, you do have a fixed rate on the first mortgage which is good. I am glad you have been able to make your payments- I would recommend you make every effort to stay current with your mortgage payments and perhaps try to sell your home and down-size or rent for awhile if you think you are over your head. Hopefully your income will increase again!
I agree with George, if you are looking at refinancing to combine your mortgages, it sounds like this may not be an option if your verifiable income will not support the payments. Have you spoken with a mortgage originator to see if this is the case?

lisascherzer · Joined: 04 Jan 2008 Posts: 755 1.03 Dollars($)

Unless the home has appreciated since the time of purchase and you can qualify on your current income, it is not likely that you will be able to do so at this time. If you think that you may have some equity and can document enough income to qualify on the loan then you may be eligible for a loan up to 95% of appraised value.

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