Is it possible to refinance?

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I bought a new home 1.5 years ago and paid 290k and did an 80/20 loan. The loans are interest only 1st 10yr 232k @6.5% and 58K@11.5% . Since the decline of the FL market the house is probably worth 260k at best. Is there any way to refinance with negative equity or at least roll it into one mortgage with a lower interest rate?

  1. Reply
    Expert Realtor
    May 2, 2011 at 4:50 am


    You tapped out 100% of your equity and the value of the home went in the opposite direction.

    Welcome to the world of homeowners that are in negative equity and can’t do anything about it.

    No bank will touch it.

  2. Reply
    May 2, 2011 at 5:47 am

    Not going to happen. The best you can hope for is a refinance for the value of the house in the current market. You would need to bring cash to the table to pay off the difference before said loan would close.

    Now do you comprehend why it’s not bright to purchase real estate with little or nothing down ?

  3. Reply
    May 2, 2011 at 5:50 am

    You can not refinance with negative equity.

    You still have about 8.5 years to go on the interest only loan. Just wait for the market to turn around and then refinance.

    At least you have plenty of time to wait until it adjusts.

  4. Reply
    May 2, 2011 at 6:49 am

    The only possible way to refinance would be to come up with a big wad of cash to wipe out the shortfall between the outstanding balance and the appraised value and add some equity to the equation.

  5. Reply
    Joe D
    May 2, 2011 at 7:43 am

    If you have recently experianced a hardship, you may be able to retain an attorney to help negotiate a principal reduction to market value on your current loan to make the payments more affordable. Check out this website and give them a call.

  6. Reply
    Steve W
    May 2, 2011 at 7:49 am

    If you owe more on the property than what its worth, you’re really not going to be eligible to refinance. It sounds to me like you bought a house that you really could not afford (interest only on both loans) and you have not paid either loan down with additional principal payments. Now, the house is worth less than what you paid (not your fault) and you want a lower rate and payment…not going to happen. Not putting money down on the house and doing both loans as interest only is the cause of the problem you are experiencing. People need to understand that if they cannot afford to put at least 5% down on a property and make a payment on a standard 30 year loan, then they should not be buying a house in the first place. You made your bed, and now you get to sleep in it.

  7. Reply
    May 2, 2011 at 8:48 am

    you can only do a loan modification if you are behind on your payments and even then its a waste of money. if you in that situation you could get the 2nd pardoned and only worry about the first thats what i did. (260K 2nd) all gone! =D

    what you should do is just wait till the market goes down more becuase it will then by another house and short sale yours. it will come on your credit but it looks better then a forclosure.

  8. Reply
    May 2, 2011 at 8:51 am

    Since your home has declined in market value you will not be able to refinance the mortgage in the current market place.

    You did not indicate you were having problems making the monthly mortgage payments. You should continue to do so since you are not having any problems in this area.

    Several years ago, about 1992 the real estate market adjusted itself with many properties falling below the mortgage owed on them.

    You simply have to wait out the decline in the value of properties.

    I would get concerned in about 6-78 years if the market has not readjusted itself and the property values start to go back up.

    The good thing about your situation is that you have a few years before you will have to refinance your home again.

    By then the market should have readjusted, values will go up and you should be OK again.

    This happens occasionally even in the stock market.

    I hope this has been of some use to you, good luck.

    “FIGHT ON”

  9. Reply
    Lisa A
    May 2, 2011 at 9:50 am

    Most lenders are approving “short refi’s” or modifying your current loan at a lower rate. Most of the time the 2nd lien holder will subordinate and take a loss up to 80%. It is pretty much hopeless to deal directly with your lender. The banks are so overwhelmed with the amount of foreclosures that they do not know the process. Hire a loss mitigation specialist to assist you. Make sure you get references before you give any money. If the company will not give references it might be a scam.
    check out this site

  10. Reply
    May 2, 2011 at 10:09 am

    No, you cannot get a loan for more than the house appraises for and yes, a new appraisal would be ordered.

  11. Reply
    May 2, 2011 at 10:49 am

    Unfortunately many other Americans are in the same boat as you. People was buying homes without thoughts of the future and now are losing them.

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