Posted on: 29th Mar, 2009 03:02 pm
Back in November, I started trying to work with my bank to try to short-refi my mortgage. My morgtgage was for ~$330k, but houses in my neighborhood have been foreclosing or short-saling for around $210k. One is currently on the block and the bank is asking $190k.
My house was appraised back in January for $232k. I have been trying for months to get my bank to short-refi my house because I want to stay in it, but they won't do anything because I haven't had any problems with my payment history. I'm pre-qualified for an additional mortgage for $223k at about 4.8%, which (if I used every last drop of it), would lower my current mortgage by about $1,200, making it much more affordable for me and ensure my family could stay in a house (wife, three kids, fourth on the way).
I have told the bank what comparable (and even larger, better, newer) houses in my neighborhood are selling for and that with my pre-approval, I could just go buy one of them and walk away from my current home. They refused to short-refi me, saying that the invetors are willing to wait out the market conditions. They won't even return my phone calls now.
I understand that's not a great option, but the economy here in Michigan is terrible. The best replacement job I can find is about 80% of my previous pay (and even that job is precarious), which would eventually force me into foreclosure with my current house. Obviously, after a foreclosure, my options become much more limited.
Anyone have any ideas? I've read a little about a DIL, which still marks your credit, but since I've already got approval for a new mortgage, is it something I should worry about (assuming I'd stay in my new home for 6-7 years)?
My house was appraised back in January for $232k. I have been trying for months to get my bank to short-refi my house because I want to stay in it, but they won't do anything because I haven't had any problems with my payment history. I'm pre-qualified for an additional mortgage for $223k at about 4.8%, which (if I used every last drop of it), would lower my current mortgage by about $1,200, making it much more affordable for me and ensure my family could stay in a house (wife, three kids, fourth on the way).
I have told the bank what comparable (and even larger, better, newer) houses in my neighborhood are selling for and that with my pre-approval, I could just go buy one of them and walk away from my current home. They refused to short-refi me, saying that the invetors are willing to wait out the market conditions. They won't even return my phone calls now.
I understand that's not a great option, but the economy here in Michigan is terrible. The best replacement job I can find is about 80% of my previous pay (and even that job is precarious), which would eventually force me into foreclosure with my current house. Obviously, after a foreclosure, my options become much more limited.
Anyone have any ideas? I've read a little about a DIL, which still marks your credit, but since I've already got approval for a new mortgage, is it something I should worry about (assuming I'd stay in my new home for 6-7 years)?
Hi aaron!
Welcome to forums!
I guess the lender is not giving you any alternative option as you have clean payment history. Moreover, you should note that lenders give the option of short sale or deed in lieu only if you are delinquent on your mortgage payments. I would suggest you to list the property in the market and check if you can get buyers. If you get buyers, then you can sell off the property. However, once you sell off the property, your mortgage will become due and you would have to pay it off immediately.
Feel free to ask if you have further queries.
Sussane
Welcome to forums!
I guess the lender is not giving you any alternative option as you have clean payment history. Moreover, you should note that lenders give the option of short sale or deed in lieu only if you are delinquent on your mortgage payments. I would suggest you to list the property in the market and check if you can get buyers. If you get buyers, then you can sell off the property. However, once you sell off the property, your mortgage will become due and you would have to pay it off immediately.
Feel free to ask if you have further queries.
Sussane