Question by Happy: What’s the deal with refinancing our mortgage?
I have a mortgage for my home that is 477K and apparently zillow.com says it is worth 447K now….I want to refinance because my husband was working 2 jobs and now he’s working 1 and the bank we have our mortgage with says if we refinance we will have to pay the same amount because we have a 7.125 interest only and we would have a principal and interest if we refinanced….what’s the deal? Is there no way to get our home a better Monthly payment with all the new laws in effect?
Answer by kapn
477K and an interest only payment @ 7.125 you need more help than I can give you……..sorry 3K a month in interest only is more than I can understand……….your credit must be in the toilet…………sorry……
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If you have good credit and can lower your rate it is possible but it sounds like the house is worth far less than you owe. The house will have to appraise for at least what you are looking to borrow in order to get decent terms. Also be aware that there will be out of pocket closing expenses you will have to pay.
I hate to say it but with the information you gave here I dont see a refi in you future. You probably need to figure out a way to pay down that current mortgage or lose the house.
What zillow.com says means nothing. How much do you owe?
You say the current value of the home is $ 30K less than you owe. If that is correct, you CAN’T refinance. There are NO ‘new laws’ in effect. 99% of what politicians have TALKED about has not even been written into a bill, let alone actually passed.
Unfortunately it sounds like you have way too much mortgage for your present income situation. There isn’t a refinance solution out there that will lower your payment especially if you are currently in an Interest Only product. You are already paying the minimum payment possible. Your mortgage is also classified as a Jumbo loan because it is over the conforming loan limit of $ 417K which is one of the reasons why your interest rate is so high. Even if you were to refinance, market jumbo rates are higher than that now because jumbo loans are one of the biggest foreclosure problems right now. PLUS with a refinance, you’ll probably have to look at a principal and interest payment which will only add to your payment.
If you absolutely can’t make the payments, my best suggestion would be to talk with a realtor to see what they think you could sell the home for and then talk with your lender to see if they would allow for a short sale of the property. This means they would let you sell it for less than you owe. Lenders are very willing to do that in this market because it is far cheaper than moving forward with the foreclosure process.