Refinance possible if no equity to avoid foreclosure?

Question

Our house in CA was bought for $406,000, now only worth 220,000 due to mortgage mess- we have adjustable rates that will go into affect in 3 years (mortage payment will increase by $1500.00 more a month then) I would like to refi to a fixed rate but we now have no equity- my hubby and I have excellent credit- is it possible???

Answer 1

Yes, as long as you can pay the balance between your original loan and the refinance plus 20% of the current value. That’s probably not the answer you wanted, but that’s the option.

Answer 2

The answer is NO.

If you had the money to pay the balance you would not be asking to begin with.

You have 3 years for the market to stabilize so sit tight and check the value of your home when you are much closer to the expiration of your ARM.

The best way to know the value of your home is by knowing what similar homes in your area are selling for.

Best collective resource is www.zillow.com

Good luck!

Answer 3

Speak to your lender now to see if a loan modification is possible.

Answer 4

The biggest problem for homeowners not in foreclosure is the foreclosure crisis itself. With 1 out of 75 homes being in foreclosure in major markets you are sure to have several in your area. Even if you are not in foreclosure yourself this is bringing down your home value and putting you in a bad spot. Refinancing is not an option, you have to go with loan modification. It is truly made for this situation. I recommend visiting a site called http://www.IamMaxed.com or calling your current lender. Several homeowners are so mad at their current lender that calling a 3rd party loan modificatin firm is the best choice.

Answer 5

It is just plain ridiculous isn't it.  Unfortunately, the answer is no.  Even if they launch the bill that congress signed yesterday, the house still l must appraise for the amount you want  to refinance.

You are between a rock and a hard place. You have a house that is only worth $200,000 (so they say, and we both know that that is bull), but you owe $406,000  - No business will take that risk that it may take 20 years or more to bounce back. The equity cannot be less than the value of the tender.    

My recommendation - save your cash, as long as you can, let it go into foreclosure, cause it makes no sense to keep it.  And take your cash and buy a foreclosed property,  Chances are they will sell your home for less than $70,000

Answer 6

There are so many people in this situation. Part is of course our fault for not fully understanding what we signed. But, there were also a lot of banks out there giving these loans knowing they were not good for the home buyer, but instead were selfish and now they are paying for it. it has got the whole country in a mess. You probably will not be able to get a loan on your house while it is upside down like that. things may be different in 3 years. talk to several people in the buisness to get some good ideas and if you ever have to walk do not let people make you feel guilty. no one wants to do that, but we are all only people trying to survive in a crazy mixed up world right now.