How do I refinance with no equity?

Welcome Tiqd,

A no equity refinance can help you in this situation. But it's never easy to obtain a no equity refinance. What you can do is, talk to the lender and request him for a separate repayment plan so that you can at least make payments till you build some equity and are able to refinance. Or else, try refinancing the first loan with a cash-out if there's equity for that. Using the extra cash, you can at least pay off a part of the second loan if not the entire second mortgage debt.

Hi Tiqd,

Welcome to the forum.

I think you can go for a no equity refinance up to 125 percent of your home value but if you owe more than your property value than you may not refinance the mortgage. So do you owe more than the property value?

Best of luck,
Larry

It's generally a very, VERY bad idea to refinance so highly because you're putting yourself in massive debt for a long time. Is this something you really need to do? As a long term strategy, I generally never advice refinancing. I've seen one my my buddies hit rock bottom thanks to it.

Hi aosotsi,

Welcome to the forum.

Are you a mortgage professional or a lender? Why don't you introduce yourself and let the community know about yourself.

Hope you can help people out with your sound knowledge and enjoy participating in this forum.

Best of luck,
Larry

Hi aosotsi,

I agree that the poster shouldn't go for refinancing especially when he has no equity left in the home. Actually what the poster has gone through is quite common. In the past 1 year a lot of people have gone for loans which they couldn't afford. And then they've landed up in foreclosures or loan workouts etc.

However, if the poster goes for a no equity refinance on the combined loan with a sub-prime lender too, i think he'd mess up his situation more. So, the best is to sell the home and pay off the loan, though he may not be able to cover the balance. Alternatively, if he can refinance the interest-only second mortgage with a cash-out option, then I think it will be fine. For this, I suggest Tiqd to have a talk with some of the lenders in this community. I hope they'll be able to come up with the right offer on the refinance loan.

Tiqd, you can go for free loan consultation with some of our community lenders and know what's the right step to take or which is the best offer for you right at the moment.

Regards,

Jessica

Mortgages are my favorite topic. Everyone seems that its okay to pay a monthly obligation for years on end when the majority of the payment goes to interest. Especially Interest Only mortgages.

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And what's the solution DJ? I hope you're talking about interest-only loans here? isn't it? are you talking about extra payments? well i think if that's what one decides to do then why go for interest-only loans.

If you have the foundation to budget properly, IE, account for all the minimums of your monthly debts, your utilities and all your living expenses, you should have extra money left over each month right?

The thing most people do not realize is that money you have sitting around does nothing but grow dust and cobwebs. What if there was a way for money to constantly move and impact your debts every single day?

I show people how to live on a average daily balance way of paying interest instead of working with an amortized schedule. Everyone knows that an amortized schedule is loaded front heavy with interest. By using money that you can easily obtain, you can defeat the heavy interest in those first few years, earn equity quicker, and pay off the debts faster. The greatest case is with a mortgage.

Its hard to explain without numbers, so I would like to ask anyone to provide me with some.

I would need monthly income, discretionary income, amount of mortgage, length of mortgage, interest of mortgage.

I could calculate how long it takes to pay off the mortgage, and how much interest would be saved.

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Hi Jennings,

Why don't you show us a Rough calculation how that will help? I would love to see that.

Best of luck,
Larry

Please throw some numbers that make sense to you, and compare my calculations with yours.

Hi,

Say someone has...........

Monthly income $5000
Loan amount of $220,000 FRM
Length of mortgage 30 year
Home value right now 180,000
Taken the mortgage 1 and half year ago.

So, according to the numbers you provided larry, and once again, its a simple and rough calculation, one of my services can show you how to pay that off in under 16 years, save over 105,000 in interest, and do all this without refinancing, or changing your lifestyle.

I had to make these general assumptions

1. You have about 10% left in after bills, debts and other expenses each month
2. You are paying about 1750 a month in mortgage, including escrow
3. You are able to get a Line of credit.

How does that compare with any other payment method?

I do not know what AlaskaDES is offering, but it sounds like he is with one of those scam companies that arrange your loan so you are making 26+ (payments) vs 24 payments a year. Most lenders will let you pre-pay principle at your own pace and they will not charge you for it. When you sign up for a "special" payment plan you are paying someone to do something you can do free by calling your current lender. As a word of advise, DO NOT go with someone who claims they can do something that others can not. When you see a special offer the chances are someone is trying to profit off of your stupidity. The more helpful the lender claims to be the more immoral he probably is.

Biweekly programs out there. It is true that your current lender will help set up a biweekly plan, but I have seen the actually lien holder charge one of my customers $1100 to set it up on their own loan.

Do your research and plan to spend about $400 to get one set up. They aren't a scam if it is done with a reputable company.

I have seen many borrowers save a lot of money with this... either way, figure out a way to do it cost effectively and do it.

The author of The Automatic Millionaire recommends setting it up on autopilot so that it will happen month after month and you can focus on the better things in life.

Best of luck!

I am not a fan of the bi-weekly plan. It FORCES you to make the additional payments. So, if you have a situation where you lose some income, then you are going to have trouble making your payments. If my customers want to reduce their balance faster, I typically instruct them to get a traditional mortgage with a monthly payment and send extra cash whenever and as often as they can.