Question by amdollar: How to refinance when your loan is higher than your home’s value?
In this day of recession and economic downturn with no upside, all I hear is that people should refinance now. An example: If a home in 2006 is worth $ 365,000 and has an interest only loan of $ 365,000, in 2009, it is now worth $ 290,000 (-$ 75k less), should he/she refinance? Now unless they come up with the 75k difference, no bank is going to offer a mortgage with over 100% LTV. Any thoughts on this???!??!
Best answer:
Answer by Wyld Bill
i am not a mortgage expert. that is not what i do for my profession. however i do know that the fed was willing to help people upside down in their loan. talk to a mortgage professional. there were some programs for a while. they may be gone by now. if that is the case you are SOL to put it bluntly. however what is your rate. please tell me you are not in one of those horrible ARMs that got us into the situation we are in now. if you have a descent fixed rate just ride it out. things will turn around……………maybe.
Know better? Leave your own answer in the comments!
Who says they should refinance? Betcha it is the people who want to sell another mortgage.
In this situation, refinancing is not a viable option. The only possible winner in this scenario is the guy (m/f) who cashes the commission cheque.
You may wish to inquire to a loan modification though your current lender. You current lender has a lot to lose (more the 75k) if you walk away from the property and may be inclined to work with you.