Can I refinance even though I owe more then my house is worth?
I bought my first house in 2007. It seemed like a good idea at the time…
I ended up buying a 2bed/1bath condo for 170K In the Scottsdale, AZ area. I put about 8K down. Making for a loan of 162K. Interest rate was 5.95%. Not to bad I thought.
Now three years later I’ve paid that mortgage down to about 150K. (I’ve been paying extra each month) However the house is probably only worth about 60K-110K, why such a wide range, well different estimating sites have been saying different things. I won’t know until I get an estimate, which I will not do until I know if a refi is even in reach for me.
I’ve seen that everyone who can, is refinancing right now to take advantage of <4.5% interest rates. I’d like to too. But I’ve been told you can’t refinance a home at anything more then an 80% loan to value (LTV). In my best case scenario I would be around 136% LTV. So I’m out of luck right?
Well I’ve heard that some places are taking refinancing deals if your credit is good enough. My wife and I are both well over 750 on our credit reports. We’ve never missed a payment, on anything.
So my question is? Is a refi for someone in my situation possible? If so, who is doing these type of deals?
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I had the exact same problem a few weeks back. save time by go through http://www.loanssource.tk
It’s not going to happen in your situation. "Making Homes Affordable Program" offers financing up to a 125% LTV, and you are above that threshold. Furthermore, mortgages available under MHAP are not at the attractive rates you cite in your question. MHAP was basically devised for those who ended up with ARM’s on which the rate skyrocketed when the original rate expired. For now, you need to sit tight and wait for a market recovery. AZ was especially badly hit with reduced property values.
Yeah, we can’t refinance for more than the value of the property. In most cases, we can go 80% to 90%, but not more than the actual market value. The only way to know the actual value of a home is to sell it. What someone will pay for it is the value. An appraisal is just an "expected sales price" based on what other people have sold similar property for in the last 6 months. Adjustments are made for the variations in the homes. The online sites can be very accurate for some areas, and way out in left field for others. I use eppraisal.com because they give you their value, Zillow and Cyberhomes all at once. The variations can be huge. A better way to get a value is to ask a local real estate agent to do a Comparative Market Analysis for you. They do these for free to generate good will for the future. They do the same basic thing an appraiser does but don’t have a license to do it.
You may be thinking of Making Homes Affordable. That programs allows a modification for some people who qualify but owe more than the value of the home. It’s not exactly a refi, but it might help.
Your rate isn’t all that bad, although today they are lower. When I first started in real estate, a good rate was 9% or 10%. We’d cry at that rate today. In the 1980s people were paying 18% and up. That we’d laugh at now.
If you’re not having a problem making your payments, I wouldn’t worry too much about it. In time, the value of your home will go back up. You have to live somewhere and your own condo is better than renting.
Not possible. 80% LTV max, even with very good credit.
forget it – with that much negative equity – no one will refi you – I’m in the same boat – not as deep, but I had gotten a 7.0% no down payment mortgage in 2006 – I’d love to get 5% now, but I figure I’m at least 20-30,000 under water, so I’ll just keep paying as I have been – not planning on moving until I retire in 13 yrs anyway – I’ll have equity then
More than likely you will not be able to refinance since you are so far underwater. You should call a lender and ask. If they won’t approve you for a refi, you can ask about loan modification if you just can’t afford your payments.
To refinance you need to bring minimum 50k in cash to the closing.
Just forget what is happening pay your mortgage adding extra when you can and in a few yrs prices will increase.
Property in Arizona has taken a worse hit than many other areas so i doubt you will find a lender that will refinance for you. If you can continue to make the payments don’t worry about it. Your mortgage should be less than $1000 per month and this is comparable to rent. Hopefully in a couple of years the real estate market will rebound and you will be made whole again. This happened to me in the late 80′s and it took about 5years to regain my equity. Good Luck