Is there any kind of refi out there for me?

I would like to refinance my mortgage to get a low fixed rate, but have had no luck yet talking to loan brokers or Wells Fargo who owns my loan, apparently because its not owned by Fannie Mae I can't do anything to change the terms as per Obama's plan.

I had to refinance my mortgage to pay off my ex-wife in 2007. My house was worth 600k then, and the mortgage was $350k interest only @5.65% for 10years, then would start to adjust after that.

I want to refinance to take advantage of the low rates and get a fixed rate. Zillo estimates my house is now worth ~$340k, and I owe ~$345k. The problem is I owe what its worth and nobody wants to do a rate reduction refi.

I have been in my job for 10 years, I have zero debt, I have other assets and great credit. My credit rating is 960. I do not want to sell my stock to pay down $50k on my mortgage in order to get a refi. I wan't to keep my assets liquid in case anything happens and I need the money. I've owned the house for many years, I don't understand why I can't get a rate reduction refinance. Wells Fargo said they can't help me because I am paying my mortgage. The only way they can help me is if I was going into forclosure. Should I stop paying my mortgage to try top get a loan adjustment? That just doesn't make sense. I don't know why they just don't charge me points and do the rate reduction refi and be done with it.

Does anyone know of any program for people in my situation? I don't want to ruin my credit just to change my loan, but I could be saving money if I refinance and I'm scared of what future inflation will do to my payments.

Thanks,
Michael

Guest

Anyone?

Bueller ?

jveenstra · Posted: Thu Jul 29, 2010 6:10 am Post subject: Refinance

Keep the loan you have or use some money to pay it down to refinance.

Do not go past due to get a modifcation. Just because the mortgage is late does not mean you get a modification. You probably would not because you have too much liquid assets. Then you ruined your credit and do not get a modification anyway.

It is okay you check Zillow for value. Zillow is often not all that accurate. You may find that a real appraisal for mortgage purposes comes out higher.
Not sure what county and state the property is located so I do not know if your mortgage is too high for FHA mortgage which has county limits. You can refi with FHA up to 97.75% of appraised value and conventional up to 95% of value.

Guest

Thanks for the reply jveenstra!

The property is in San Jose, CA.

I don't want to ruin my good credit, so I won't be going delinquent.

If I remember correctly, someone said FHA was going to be a lot of paperwork and cost a lot and I would end up with PMI on top of it too so I really didn't really consider that an option.

jveenstra · Posted: Fri Jul 30, 2010 6:18 am Post subject: Refinance

FHA is not really any more paperwork.

I mentioned FHA because you already indicated the value of the property may not be high enough to avoid PMI with a conventional loan. Depending on the appraised value and the amount of money you would have to spend to get the mortgage below 80% of value to avoid PMI. FHA is an alternative to consider depending on all the circumstances.
If you have a choice between FHA and conventional, probably do conventional. If FHA is the only choice, consider the FHA loan to get out of what you have now.

Good luck!

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