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How do I buy a more affordable house when I am behind in my current mortgage?

We are stuck in an ARM mortgage and have been trying for 2 years to get qualified for the making home affordable plan to no avail as yet.  Our principle amount is $90,000 over the current market value.  We may end up walking away if they can't help us.  We need to get into a 30year fixed and get our mortgage amount to no more than $1,000 a month instead of the $1400 interest only payment that we pay now.  We have not been able to touch the principle in over 5 years.
  • October 25 2012 - Yuma
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Answers (4)

There are many factors involved in your situation; I need more information but may be able to help point you in the right direction.  Feel free to email me so your personal information is posted for all to see.  [deleted by Zillow moderator. Please see our Good Neighbor Policy for posting guidelines]
  • November 13 2012
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You may want to try and refinance the loan but you will want to talk to a lender about it.  I am a very experienced short sale agent and would be happy to help you if you decide this is the route you want to pursue.
  • October 30 2012
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Profile picture for SoCal Engr
If you're paying $1.400/month on an I/O payment, then it's not likely that you're going to get to <$1,000/month on a regular loan - even with lower rates.
 
Without considering whether/If you could/would qualify to re-fi, use any of the mortgage calculators on the Internet and you can determine what the payments would be "if" you could re-fi your current balance at current market rates. This would at least answer the <$1,000/month question.

As for your initial question, the short version is likely "you can't". Since you are underwater, the only option to sell would be a short-sale (unless you can bring the additional cash to the table at closing) - and that would negatively affect your credit, which is already being affected by the late payments you indicate in your question.

I am assuming that you do not have the income/assets to just go and buy another house outright - otherwise you'd not be in the situation you're currently in (just an observation).
  • October 25 2012
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  • October 25 2012
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