Refinancing a possible upside down mortgage

Has anyone refinance recently and had what they thought might be an upside down mortgage? Can you share your thoughts/ experience? Do they take into consideration of today's low mortgage rates?
We would love to refinance but we're not sure if we are upside down or not. We refinanced 4 years ago at 6.785%. I feel like we lost equity in the house in the last 4 years due to the poor housing market. Do you think it's worth it to try or will I just lose money on the application fee?

Re: Refinancing a possible upside down mortgage

If you have an upside down mortgage, refinancing is probably not an option.

I am underwater on my condo by about $50K and have contacted about 10 banks, all which reviewed my preliminary info and said I didn't qualify. In order for them to approve it, I would need to kick in at least 30-50K of my own savings at closing to bring the balance down to where they would approve a 105% Loan to Value loan (think this is the max allowed under fed mortgage programs now, I have heard they have programs that go to 125% of the loan value). Needless to say, it was pointliess so I am waiting until 2018 or so and then re-evaluate if interest rates are still low to do it.

If you contact the banks, they will probably ask to for an appraisal (can be anywhere from $ 350-500) and that money comes out of YOUR pocket. They wont start an application until that appraisal comes in, and if the appraisal comes in way below the current balance- they are unlikely to go forward with the process.

Re: Refinancing a possible upside down mortgage

Is there any way my mortgage broker can tell me if I am upside down before we hire an appraiser?

We did do an addition to the house last year and have no idea what the current value of the house is.

Re: Refinancing a possible upside down mortgage

Have you done basic searchs for the comps in your area using Zillow or a local realtor?

Sometimes if you contact a local realtor, they can give you a rough estimate based on what other houses in your area sold. I have used MLSLI.com and searched under "Sold" Properties to get an idea - but once I got the official Appraisal (which came in 52K below my mortgage balance) my lender pretty much said forget about it. I would try that avenue first - and if you have an extra $ 500 to spare, then contact your lender who will order the appriaisal to give you the exact number. Nothing can be done until that appraisal is actually done.

Re: Refinancing a possible upside down mortgage

Thanks! I didn't know MLSLI had a "sold" section. It's interesting, houses in my neighborhood is very mixed. I'm still clueless. lol

Re: Refinancing a possible upside down mortgage

We are in the process of refinancing, they did send over an appraiser right away.

I guess thats really the only way to know for sure what your house is worth, i dont believe the mortgage company would go ahead without the appraisal...now we wait

Our rate is 6.375% and we are down to 3.375%

We are saving over 200k in interest by going to a 15 year as well. Its so worth it!

Re: Refinancing a possible upside down mortgage

Let me know if you need help finding comps. You basically need to look within the same town, same school district, and at the same style home (e.g., if you live in a cape, don't use split levels as comps). Ideally, you want to stay within a mile of your house -- a half mile is even better -- and try to stay in the same general neighborhood (if you have a major road or parkway that runs through your town, try to keep the comps on the side you live on). If possible, look for sales within the last 3 months, but definitely don't go back more than 6 months.

It's easy for me to pull comps, so if you need help, let me know.

Also - with refinancing, keep in mind that you have to qualify for the loan all over again (you are basically getting a new loan). So think about whether anything in your situation has changed (job-wise, income wise, credit, etc.) since you first obtained your mortgage.

Re: Refinancing a possible upside down mortgage

i just refinanced through Chase for a HARP loan. its for people who are upside on their loan. the stipulation is you cant shop around with other lenders. you have to use your current lender, and the rate is not as low as a regular refinance. BUT, i do recommend shopping within your bank. i got 3 different closing costs and rates within Chase. If you have Chase I highly recommend the guy i used. LMK.

I refinanced to a fixed 30 year with a 4.875% rate. i was upside by 103%.

Re: Refinancing a possible upside down mortgage

Re: Refinancing a possible upside down mortgage

Posted by lucamon

Posted by IansMommy23

i just refinanced through Chase for a HARP loan. its for people who are upside on their loan. the stipulation is you cant shop around with other lenders. you have to use your current lender, and the rate is not as low as a regular refinance. BUT, i do recommend shopping within your bank. i got 3 different closing costs and rates within Chase. If you have Chase I highly recommend the guy i used. LMK.

I refinanced to a fixed 30 year with a 4.875% rate. i was upside by 103%.

I already called up my mortgage broker to see what he can do for us. Does that disqualify us for the HARP since we're shopping around? We currently have BOA and we hate them so I don't if we want to use them again.

Re: Refinancing a possible upside down mortgage

Posted by lucamon

Posted by IansMommy23

i just refinanced through Chase for a HARP loan. its for people who are upside on their loan. the stipulation is you cant shop around with other lenders. you have to use your current lender, and the rate is not as low as a regular refinance. BUT, i do recommend shopping within your bank. i got 3 different closing costs and rates within Chase. If you have Chase I highly recommend the guy i used. LMK.

I refinanced to a fixed 30 year with a 4.875% rate. i was upside by 103%.

I already called up my mortgage broker to see what he can do for us. Does that disqualify us for the HARP since we're shopping around? We currently have BOA and we hate them so I don't if we want to use them again.

Message edited 9/7/2011 8:51:46 AM.

Re: Refinancing a possible upside down mortgage

I'll give BOA another chance since I have to use them for HARP but I do want them to come down for an appraisal because we added 2 rooms to the house last year.

Re: Refinancing a possible upside down mortgage

Re: Refinancing a possible upside down mortgage

Posted by IansMommy23

Posted by lucamon

Posted by IansMommy23

i just refinanced through Chase for a HARP loan. its for people who are upside on their loan. the stipulation is you cant shop around with other lenders. you have to use your current lender, and the rate is not as low as a regular refinance. BUT, i do recommend shopping within your bank. i got 3 different closing costs and rates within Chase. If you have Chase I highly recommend the guy i used. LMK.

I refinanced to a fixed 30 year with a 4.875% rate. i was upside by 103%.

I already called up my mortgage broker to see what he can do for us. Does that disqualify us for the HARP since we're shopping around? We currently have BOA and we hate them so I don't if we want to use them again.

You can't be disqualified for shopping around, only if you are NOT upside down. If you are then you have to stay with BOA. That's the rules of HARP. You know if you're upside down if you owe more than the current value of your home. The bank should tell you that. Or if you live in Nassau county you can find the value online. Oh and if you do get a HARP loan don't let them charge an appraisal fee! Your home does not get appraised.

Message edited 9/8/2011 1:45:59 PM.

Re: Refinancing a possible upside down mortgage

We're upside down in our mortgage and just refinanced with a HARP loan in June with NO problem. We had our interest rate lowered from 6.25% to 5.25% and we're saving $370/month on our mortgage payment. We went through Chase, it was VERY easy to get it all done because they already hold our first mortgage. For us, it was SO worth it!!!

Re: Refinancing a possible upside down mortgage

Re: Refinancing a possible upside down mortgage

Posted by shiv

Posted by IansMommy23

Posted by lucamon

Posted by IansMommy23

i just refinanced through Chase for a HARP loan. its for people who are upside on their loan. the stipulation is you cant shop around with other lenders. you have to use your current lender, and the rate is not as low as a regular refinance. BUT, i do recommend shopping within your bank. i got 3 different closing costs and rates within Chase. If you have Chase I highly recommend the guy i used. LMK.

I refinanced to a fixed 30 year with a 4.875% rate. i was upside by 103%.

I already called up my mortgage broker to see what he can do for us. Does that disqualify us for the HARP since we're shopping around? We currently have BOA and we hate them so I don't if we want to use them again.

You can't be disqualified for shopping around, only if you are NOT upside down. If you are then you have to stay with BOA. That's the rules of HARP. You know if you're upside down if you owe more than the current value of your home. The bank should tell you that. Or if you live in Nassau county you can find the value online. Oh and if you do get a HARP loan don't let them charge an appraisal fee! Your home does not get appraised.

This is very different information from what I've been getting. I spoke with a broker who said he could refinance my underwater home through the making home affordable program. My bank can also do it. Both have said we need an appraisal.

ETA: Here's some good info on the HARP program:

HARP Loan

We are currently shopping around our HARP refi.

Re: Refinancing a possible upside down mortgage

Re: Refinancing a possible upside down mortgage

Posted by Hofstra26

Posted by EclecticEsq10810

If you have an upside down mortgage, refinancing is probably not an option.

I am underwater on my condo by about $50K and have contacted about 10 banks, all which reviewed my preliminary info and said I didn't qualify. In order for them to approve it, I would need to kick in at least 30-50K of my own savings at closing to bring the balance down to where they would approve a 105% Loan to Value loan (think this is the max allowed under fed mortgage programs now, I have heard they have programs that go to 125% of the loan value). Needless to say, it was pointliess so I am waiting until 2018 or so and then re-evaluate if interest rates are still low to do it.

If you contact the banks, they will probably ask to for an appraisal (can be anywhere from $ 350-500) and that money comes out of YOUR pocket. They wont start an application until that appraisal comes in, and if the appraisal comes in way below the current balance- they are unlikely to go forward with the process.

HARP loan - It's for people who are current with their mortgage but upside down. We just closed on ours in June. Cost about $4K to refi - rolled it into our principal. As I said above, we went down a point in our interest rate and we're saving $370/month. You should look into that if you're wanting to refi. It was VERY simple to do.

NO appraisal was necessary with Chase. They use their own comps for the area.