How can I get a High-LTV ration mortgage refinance loan?

Question by JeepGuyNewYork: How can I get a High-LTV ration mortgage refinance loan?
I have a recently purchased Condo in DC with a value that continues to tank with the economy. Currently have 2 mortgages on it making the LTV somewhere in the neighborhood of 110 percent. Looking to refinance (I have relatively high income, excellent credit) Property value approximately $ 250,000 and I owe $ 270,000 combined. Anybody know if I can even expect to find a lender in this economy willing to lend in this situation?

Best answer:

Answer by OldJimmy
I haven’t seen anyone making high LTV loans lately. It’s going to be tough to find one.

If you have a good payment history with your lender, I would contact them and ask them if they have a rate modification program. They do this to keep good customers from running off to other lenders via refinancing.

For a small fee (maybe 300-500) they agree to reduce your interest rate, with the principal balance and original maturity date remaining the same. It won’t be quite as good as the best rates on the market today, but it will be close and if it is lower than what you are paying now your payment will go down. And the low cost to do this makes it pay off very quickly.

Give this a shot, and hopefully they won’t realize that it is going to be difficult for you to leave them.

Alternatively, if you can find a way to come up with some cash to bring your loan amount down, you have some other alternatives. About a year ago, Bank of America was offering 95% financing with no PMI to customers that had nice deposit accounts with them. And no closing costs. I don’t know if this is still available (check out their web site to find out) but it was a great deal.

Know better? Leave your own answer in the comments!

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7 Responses to How can I get a High-LTV ration mortgage refinance loan?

  1. Spock (rhp) says:

    you’re under water in a falling property market. why would any rational lender want to lend to you?

    best bet — the firm that holds the second mortgage. they’re in the next to worst position [after you, of course]. maybe they’d be interested in refi-ing the whole bit into a single loan with no outside first mortgage ahead of them.

    Frankly, if they sold the second to syndication or packaging I think the chances are very poor. Buyers of that sort of paper aren’t interested in putting up more cash, but in selling out.

    Other ways and means — if you have a significant stock portfolio [one million or so], you might save a fair bit of interest by taking a margin loan and paying off both mortgages.

    The profitable way to do this is to buy in the mortgages at a discount.

    Trying to do it directly likely won’t work — as soon as the mortgage holders get a whiff of you trying to buy in your own debts, they’ll hold out for 100 cents on the dollar. So i’d want to use an intermediary to make the offer and close the discount deal — who immediately turns around and sells the mortgages to you [still at a good discount and with some profit for their work].


  2. Voyage Home Loans CA says:

    You have options… if you qualify. If you have a fannie mae or freddie mac loan you can. They will allow you to do a rate and term refinance up to 105% of your value. In october you they are moving the limits up to 125%. They will not let you pay off your 2nd though, but you may be able to get a better program for your first right now. The link below will give you access to check if you have a fannie mae loan. Make sure you put your info in exactly how it is on your mortgage statement. Good Luck!

    Josh H
    Voyage Home Loans
    Sacramento CA

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