Q&A: Can I refinance a home that has an upside down mortgage?

mortgage refinancing
by justin

Question by sully5408: Can I refinance a home that has an upside down mortgage?
I have a 30 year fixed mortgage FHA. Can I refinance this for a lower intrest rate without having to bring what I am upside down on the mortgag? Any ideas

Best answer:

Answer by Bruce Qualters
if you can pay the closing costs on the loan out of your pocket you can get an FHA streamline refinance done. It does not require an appraisal though you will most likely have to pay the total closing costs minus the new up front mortgage insurance premium.

The only exception would be if you have been in the home for a significant amount of time.

Closing costs are reduced on a streamline so not as bad as a normal refinance. If you are in a state where recording tax stamps need to be paid on the full amount of the new mortgage you can generally alleviate that cost by refinancing with your existing lender or through a broker that can arrange the transaction through your current lender. Quickest way to determine if a broker is an option to get a price comparison from your existing lender would be to google the name of your lender followed by the word wholesale if they have wholesale then they work with brokers.

What age of reason has said is completely false there are a huge number of instances where financing can exceed 80% of the value and even cases where it can exceed well over 100% of the value. see HUD link

What do you think? Answer below!

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4 Responses to Q&A: Can I refinance a home that has an upside down mortgage?

  1. Age of Reason says:

    No you cannot . No lender will provide more then 80% of the homes value.

  2. Realtoratheart says:

    No because the appraisal is key, and if you’re upside down, the appraisal won’t come out either. I suggest you try working with your lender on a loan modification.

  3. daeve930 says:

    A lender will determine the loan to value ratio based on your credit worthiness and income. It will probably be 80% although it could be a bit more. The only way we’ll refinance if you’re upside down is if you pay the difference at closing.

  4. John says:

    Tips to Refinance Upside Down Home Loan Refinance

    If you are upside down on your mortgage and it is creating difficulty for you, then you can refinance your loan. Borrower need not to worry much about it as they still have a hope and chances to save their homes by getting their upside down mortgage loan refinanced by the related lenders.

    1. You can refinance your loan by lowering interest rates which will help you to stay in your home. Some homeowners are tempted in a myth that the rates are going to be decreased further because of the bad economic scenario but it is advised that you do not take risk and wait for the situation to get worse.

    2. You can be offered for a fixed rate mortgage loan by the lender to refinance your upside down home loan easily.

    3. You must keep in mind objectives that will help you to figure out what type of loan you want and whether it will fulfill your financial goals.

    4. You can even stay with your existing home mortgage rates. They may be reduced some fees to help you refinance in better way.

    5. A professional help can be taken by an agent. You can appoint him to take care of your situation professionally and understand your circumstances to work upon it further.

    6. Do not pick calls of anyone unless you approach to the loss mitigation department. You are needed to call them to know how to refinance an upside down home loan mortgage.

    To Apply for upside down mortgage refinance you can try here : http://www.loansstore.com/mortgage-refinance-loan-application.php

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