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80/20 refi to 1 loan

Like many folks on here, we purchased right at the height of the market- currently we owe about 290k, last appraisal was 320k (Zillow is currently showing 270k, but we've been told those numbers aren't quite right for a variety of reasons), may have changed a bit with the current market conditions in Denver.  What's killing us is the interest rate on the second mortgage which  is at 8%- our primary mortgage is at an ok rate of 5.5%- makes our overall payment about $1900 rolling in insurance and taxes.  Anybody have any thoughts on getting the amount of interest payed reduced?  We're both 750+ for credit score.
  • March 05 2012 - Montclair
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Answers (3)

Best Answer

Since this is purchase money and depending on the appraised value, there may be an opportunity with FHA. I haven't done the math to see if combining the 2 with FHA up to 97.75% may benefit you, but at 5.5% and 8% it very well may, even if you have to pay the mortgage insurance. I'd contact Nic Netherton who is in your state and see if he can run some numbers for you. The property would have to appraise for roughly $296,675 assuming your 290K payoff number.
  • March 05 2012
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shinzen-

You are correct not to give much credence to the estimated value this site gives you for your home and doing your research first on the approximate value prior to deciding whether to refinance is a smart move.  If it would be helpful I would be happy to have a property profile report prepared for you to give you detailed information on your neighborhood as well as recently sold comparables to give you a better idea of where you may stand. Feel free to contact me by clicking on my name above and sending me a message with your property address and I can have the report ready for you this morning. 
  • March 06 2012
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There are no refinance programs available that allow the combination of a second loan into one new loan if that new amount will exceed your current appraisal value.

If your primary loan is Fannie Mae or Freddie Mac owned, you might be able to HARP refinance that loan ONLY and keep the second as is.

If you want to combined the two loans, FHA would be your best option with a new loan amount allowed at 97.75% of appraised value.   If you could appraise at 300,000 you might be able to fit, and if slightly lower appraisal perhaps cash into closing to bridge the gap would be worth looking into.
  • March 05 2012
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