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robertdavidson2 · Joined: 10 Apr 2009 Posts: 1 1.54 Dollars($)

Hi, I bought my home in November 2007 right as the market was starting to get bad. Since then, the value of my property has gone way down and has caused my LTV ratio to go just above 80%. I've been told that it needs to be 80% or lower in order to refinance without putting any money down and/or getting mortgage insurance. I have never missed a payment, my credit is good, I pay bills on time, I'm not in danger of losing my job, yet I can't refinance my mortgage unless I fork out some money to make up for the difference in my LTV ratio. I don't think this is fair - I've done everything everyone's asked me to do and I'm getting the short end of the stick here while others are able to save 200-300 dollars a month on payments. Why can't I be a part of this, too?

gmakerley · Posted: Fri Apr 10, 2009 10:33 am Post subject:

robert you are the victim of circumstances beyond your control, but it's also beyond the control of those of us who would be lending to you now. yes, you suffer because the market has tanked in many places. that "tanking" is not only because of the subprime market, but also because prices were inflated beyond where they ought to have been to begin with.

jameshogg · Posted: Fri Apr 10, 2009 7:26 pm Post subject:

Hi robertdavidson,

It is correct that lenders won't refinance the loan if your LTV ratio is above 80%. You should note that as the LTV ratio of a loan increases, the required guidelines for mortgage programs become strict. Borrowers with high LTV ratio are required to buy mortgage insurance to protect the lender in case of a default. This also increases the costs of the loan. In my opinion, you should either pay some money to make up for the difference in your LTV ratio or go for a PMI.

Thanks

Guest

Robert,

I'm in the same boat you are. We bought our house in the summer of 2007 and put 20% down to avoid PMI. Now that we want to refi, we may have to go backward and pay PMI if the appraisal comes in low.

What is your current rate? We are at 6.5. Even with lender paid PMI we will goto 5.25 which is much better than 6.5. W/O lender paid PMI (depends on the appraisal) we can get 4(7/ Cool

.

We have already locked in our rates and are going ahead with the appraisal. If the appraisal comes in horrendous we can still walk away and only be out $300 for an appraisal fee.

What is you plan? I'm interested to know because it seems we are in the same boat.

Guest

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gmakerley · Posted: Mon Apr 13, 2009 10:09 am Post subject:

yeah i'll bet you can help

mtgfixit · Joined: 13 Apr 2009 Posts: 73 28.11 Dollars($)

This is becoming a huge problem for many homeowners at this time. I know you are concerned about paying PMI, have you thought about 1. taking out a new 2nd mortgage for the remaining balance or 2. Going FHA, the MI is a lot less than PMI - but keep in mind that you will incure an upfront MIP. There are still lenders that do not require PMI, but the rates will be a bit higher.

gmakerley · Posted: Tue Apr 14, 2009 9:13 am Post subject:

lender paid mi is much more sparse than ever before. it was a delightful alternative inasmuch as it was a "feelgood" thing for borrowers. they were paying mi through the rate instead of as a separate item. now that it's tax deductible, it's far less unsettling if pointed out to a borrower correctly.

ashleyblanton · Posted: Tue Apr 14, 2009 5:02 pm Post subject:

If you currently hold a Fannie Mae or Freddie Mac loan you may qualify for the new program Obama rolled out. If you do not know if you have one of these loans, please feel free to contact me, i can find out for you.

If you are currently NOT paying MI and qualify for the program then even above 80% you will not have to pay MI.

Good luck!

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