Question by Mallory: Why can’t you refinance a upside mortgage if you current on payments to take advantage of low interest rates?
I make my mortgage payments on time but mortgage is upside down. I’d like to lower my payment by refinancing the amount owed but banks want me to go thru gov loan modification programs. Go there and you can’t qualify because your NOT behind on your payments. If I’m on the hook for the mortgage what difference is it to the bank if I refinance the amount and put myself in a better financial situation?
Answer by MSAD
You can’t borrow more than the asset is worth.
At the time the bank agreed to give you money – the house was worth the amount borrowed. The bank did not loan you more than the house was worth.
You can re-fi an underwater house. You just have to have the ability to write a check for the difference between the amount of the loan and the value of the house.
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