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alvarengaj80 · Joined: 05 Jan 2009 Posts: 3 2.54 Dollars($)

I have an investment property that the loan just adjusted and my payment went up by $400. Now my broker is saying we cant refinance right now or do a loan modification. Is there anything I can do to keep my property.

Jessica · Posted: Tue Jan 06, 2009 6:16 am Post subject:

Hi Alvarengaj,

Welcome to our community forums.

I think you have taken out an adjustable rate mortgage on your investment property. The rate has reset and that's the reason payments have gone up. But did you ask the lender as to why he won't allow you for a refinance or loan modification?

By the way, a loan modification is allowed when you're in default on the mortgage. perhaps you haven't missed payments for 2-3 months. Until and unless you're behind on the loan, the lender won't allow for a modification. This is primarily a hardship program.

Compared to loan modification, I think you should opt for refinance because fixed rates are quite low currently. 30 year fixed mortgages have dropped down to 5.8% (national average rates) and 15 year loans are available around 5.16%.

Though there are loan costs involved in a refinance, yet you can get the benefit of low interest payments. The interest savings can offset the costs if you stay on the property for quite some time. Just have a straight talk with the lender as to why he has denied the refinance.

Regards,

Jessica

gmakerley · Posted: Wed Jan 07, 2009 3:03 pm Post subject:

you didn't specify why your lender made such a statement. that would be instructive and would allow us to give you more information from this end.

alvarengaj80 · Joined: 05 Jan 2009 Posts: 3 2.54 Dollars($)

My lender told me that the banks are currently not working with owners who have investment properties. Is this true?

adonis · Posted: Fri Jan 09, 2009 12:39 am Post subject:

Well, I haven't heard anything of that sort. You may contact other lenders as well and check if they are ready to work with you.

gmakerley · Posted: Fri Jan 09, 2009 9:21 am Post subject:

i'm quite sure that there are lenders who will be more conservative and therefore discontinue their loans for investment properties. at the same time, i'm quite sure that there are plentiful lenders who'll continue to work with investors.

things are far more restrictive than we've seen in the past, but you ought to be able to find someone to work with.

eric1 · Posted: Fri Jan 09, 2009 7:49 pm Post subject:

The prior statements are all true in that there are lenders who will finance an investment property. However, we need more details...

Loan amount
Property value
type of property (condo, 4 family, etc)
credit score

Guest

I saved my money for 5 years, and last January, bought my first property, which is actually considered a second home. (condo in ski resort - will be my retirement home, but now I rent it out). Put down 10%, took a first mortgage at 6% (which is good, i know), and a second mortgage right away to avoid ppi insurance. I have been paying bi-weekly, and put $10k to pay down my 2nd mortgage- trying to do all the right things and be a good home owner.

When the rates dropped, I contacted Wells Fargo, and because I have more than 75% borrowed and it's not my primary residence, they said there was nothing they could do.

My credit is great, I work very hard, and things are getting tight in my house hold just like everywhere else. What can I do to take part in the lower interest rates?! The only company that said they could help was $8000 in fees, and a bit shady.

Thanks in advance.

gmakerley · Posted: Fri Mar 20, 2009 2:37 pm Post subject:

rik, your situation is untimely. by that, i mean that you've run into a marketplace that shuns loans on second homes over a certain loan to value ratio.

in my opinion, you'll just be beating your head against the wall looking for someone to beat your 6% rate. inasmuch as you seem to be doing all the right things to reduce your debt, etc., the best bet is to simply continue doing that and sit tight.

Guest

I can't refi my investment property because I have 10 points below the requirement score(mine is 631). How can I find mortgage companies with less restrictions for points or salary.

jameshogg · Posted: Wed Nov 04, 2009 8:36 pm Post subject:

Hi fari,

I guess it would be difficult for you to find such a mortgage lender who would approve your loan though your credit score is less. Why don't you improve your credit score and then apply for loans? It won't take much time to add 10 points to your credit score. Take a look at the given page to know some steps to improve your credit score:
http://www.mortgagefit.com/credit-rating/credit-repair.html

Thanks

propertyinfo · Joined: 04 Oct 2009 Posts: 14 0.36 Dollars($)

Fari,

you could look at some of the various methods of increasing your credit score - 10 pts isn't much and you could probably get it up pretty quickly.

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

Fari,

there are a lot of lenders out there, and if you're that close you'll probably be able to find one that will bend a little for you but you've got to be prepared to look around.

the internet is a great tool for this as there are plenty of lenders that will provide quotes online. take a look at some Mortgage and refinancing sites and see what's around.

gmakerley · Posted: Wed Nov 11, 2009 2:42 pm Post subject:

"bending" isn't in the common parlance these days. lenders are predominantly married to the secondary market, and those forces are adamant about the paper they'll buy. a 630 score isn't going to find much bending being done. there are lots of sites, i agree, and lots of imaginary quotes out there...keep in mind that anyone can quote you a rate off the cuff, but getting it and keeping it are not quite the same.

riseabove · Joined: 09 Nov 2009 Posts: 277 11.01 Dollars($)

Fair point - lenders are pretty risk averse these days, but if you're that close you'll probably eventually find someone who wants your business enought to step slightly outside the box, it'll just be a harder job than previously, and you may have to accept some unfavorable terms.

Point is, don't be discouraged if you get a few knock backs - keep plugging away.

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