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Go for a loan modification or try and re-finance?

Okay, I'm looking for some advice here...

I currently have an ARM, yet it has not adjusted. It was supposed to, but because of all the mess, they didn't. But if I miss a payment, then they said it will adjust.

The original plan 3 years ago, was to get this, and then refinance by now and get in something better once my credit scores get better.

Well, I am now underwater, upside-down, whatever it's called now. I owe about 130k and my home is only worth around 90-95k.

I don't plan on moving and I'm not looking to have 30-40k written off (but it sure would be nice! ;o) ). I understand that my home value will eventually recover.

I talked to my mortgage company and they are sending me the necessary forms for a loan modification.

My question is, would that be the best way to go? Is there another option. I want to get away from this ARM. And I want to get a lower interest rate (currently 9.25) and lower monthly payments (currently 1100). My budget is stretched to the limit and I need breathing room.

Thoughts, comments, questions???

Thanks all for the help in advance!!!
  • March 10 2009 - Madison Heights
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Answers (2)

Loan modification is your only choice since you don't have sufficient collateral. The obama plan gives up to 105% of the house valuea nd yours is worse than that so the lender would have to offer a write down under the Obama plan if you qualify and they will agree. KEEP CURRENT OTHERWISE the aobama plan doesn't work. It is for struggling homeowners not irresponsible ones. the house payment can come down to 31% of your gross income on the Obama plan, if your payment is there already, than your bank can do a modification out of courtesy but it won't be an obligation for them.

  • March 10 2009
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Based on the Loan to Value I do not think Refinancing is an option.
  • March 10 2009
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