Refinance Woes

jperdomo · Joined: 18 Jul 2008 Posts: 1 2.00 Dollars($)

Hi,

I am interested in finding out what my options are regarding refinance options for my wife and I.

We originally bought our house (8 years ago) as an investment. The price was very low ($116,000) and I knew that the area prices would rise.

We had planned to stay in the house for about 5 years the sell. The prices skyrocketed as we predicted. At the highest point (during better housing times) the house was appraised at $330,000. However, due to health reasons and employment gaps we were unable to sell when we wanted to. We refinanced once to consolidate all our bills. So our mortgage went up to about $213,000. Then I was laid off and we fell behind on our mortgage. Indymac reinstated the loan but charged us huge fees and penalties taking our mortgage up to $250K. Our mortgage payment went up to $2800.00. We really cant afford this payment, our credit has suffered and now we are below 600. Our income is abour $95K a yr but with our credit score we are finding it very difficult to find a lender that would approve us without a crazy 12-13% interest. The house is probably worth $290 - 300 now. We have the income and can afford a payment of about $2000 - 2200. With our situation can anyone provide me with any advice and/or opinons as to what to do.

Thank you

Guest 0.10 Dollars($)

Hello.

Try to improve your credit first. With your credit score, the interest rates are going to be higher. If you have 680 credit score then you can get lower interest rates.

Jeanette · Posted: Sat Jul 19, 2008 8:08 am Post subject:

Since you wanted to move in 5 years then you still have to decided if you want to sell or not. Now is a good time to sell with a good amount of equity in the property. If you do not want to sell, then the other option is to refinance. You have the equity to refinance with a ltv around 90%. The next thing is to get your credit repair which can take 30 days if the individual or broker knows how to do it. In the event, that repair will bring your score up higher. So, with a low LTV and high score you will have a better chance of getting a low rate. Your income seem to be sufficient but will have to run your report to determine your DTI. (Debt to Income ratio). You can do a refinance in year of doing a refinance. You will have to wait at least 12 months. You are getting a hard money lenders offering you 12-13% rate so your scores must be really low. Repair your scores/credit report and that will put you in a better position.

Good Luck

Jeanette Smith
Mortgage Planner
Union Mortgage Group

sweeney · Joined: 20 Jul 2008 Posts: 103 21.61 Dollars($)

Have you thought about putting it back on the market at a lower price?

brian1 · Posted: Sun Jul 20, 2008 8:42 pm Post subject:

gmakerley · Posted: Mon Jul 21, 2008 8:23 am Post subject:

i was thrown by the word "investment" in your original post, jperdomo; but after re-reading, i see that you meant you figured to make money with the home. well...you did...when you refinanced you got some cash.

now your best bet is, as brian alluded to, fha (probably). guidelines are more forgiving, and if your scores aren't excessively low, you ought to be able to do a rate/term refinance at a reasonable interest rate.

i think you need to shop for a different lender - one who offers fha loans.

one thing you didn't note is the current state of your mortgage - have you been late in recent months? how long ago was it that indymac reinstated the loan? the answers to these two questions could make a substantial difference in how your search for a new loan is treated.

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