by Jim Carson
Question by Lucy S: What are the disadvantages of refinancing when ones property is devalued by about ,000?
I would like to know if it is worth it to refinance a mortgage that has only about 12 years left, just to take advantage of a lower rate, so as to pay less monthly mortgage. I am between jobs and finding it difficult to pay. Also does refinancing put cash back in your hands? Please help!
Answer by KateG
Refinancing has costs for you to do, and while it may lower your payments, since your loan is so far into it, refinancing might actually set you back. You are now paying down equity, while in the early part of a loan, you are paying interest only. You need to figure out what the loan cost would be, what the monthly payments would be and your equity situation. And no, refinancing does not put cash in your hands. Refinancing is taking the value of the home and rewriting a loan, so essentially you are starting over. You are better off right now trying to work it out, using other cost cutting measures to save money elsewhere. Unless you are paying an excessively high mortgage rate, I wouldn’t do it.
Give your answer to this question below!
You say your property has devalued 40,000 what is it worth. To refi you would have to show the ability to pay for the mortgage so you first should try to get a job in the same line of work to qualify. the intetest rate on the new loan should be at least 3 % lower
Means on top of closing costs you need to pay 40k. No lender will provide more then 80% of homes value
if you are between jobs – NO lender is going to let you get a new loan
~~No one will lend you the full amount because you now owe more than it is currently worth. What you need to do is to contact your mortgage holder and ask for a modification due to financial hardship. Because of the high rate of unemployment and the drastic real estate devaluation, there are programs in place to help people in your situation. Call them today, and they will go over your options.
Below is the link to the government programs so you can understand your options. Best of luck.~~