Profile picture for chrome olena

I owe $680,000 on my home that is valued at 539,000 interest only at 8% due in 5years.

I don't want to move.  Is their a way that I could qualify for a lower interest rate?  Is there
anyway I could get a loan on the current value?
  • October 02 2010 - Knightsen
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Answers (8)

Profile picture for karlaw

I would try contacting your mortgage company to see if there's a possibility of loan modification. You can also try working with a mortgage professional to see what your options are with regards to refinancing. Either way, I would proceed with caution. I wish you the best.

  • October 03 2010
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There's a possibility. More information would be needed. If you wish to contact me, I'll do my best to help you.
  • October 03 2010
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8% seems a little high, is that the highest the rate can adjust or what you're actually paying now?

If you are considering a loan modification as has been suggested here by others, DO NOT under any circumstance skip payments because the bank tells you they can't consider a modification until you're behind.  This isn't true and can cost you any chance you have of refinancing.  

Also during the modification trial payments keep the difference between the two payments on hand, if your modification isn't approved you'll have to pay back the difference in payments.

Go to makinghomesaffordable.gov to see if your current loan is owned by Fannie Mae or Freddie Mac, if the loan is owned by either of them, your lender has to work with you on modifying your loan.
  • October 03 2010
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Well the balloon, balloon with reset and adjustable rate all come into question here, so the note is a key piece of your puzzle. In any case with the current value vs. the balance, trust me the lender is in no hurry to own the property if that can be avoided. So to provide sound advice we all would need much more in the way of details.  There are many possible solutions here under the home affordable initiatives, and possibly under expanded conforming guidelines.  If you would like guidance to help with the needed info and resources available to get you closer to an answer, please feel free to contact me.

  • October 02 2010
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Profile picture for LK91
What are the particulars of your note....is the balance of your loan due in 5 years or is it simply resetting?

I have a 5/1 ARM Interest Only loan on which I currently pay 6%....because it's based on 12 month LIBOR with a premium of 2.25, it should reset to around 3% in February.  I'll get that rate for a year.  If tradition holds re: LIBOR, it shouldn't reset any higher than 4% in 2012.  I'll get a year of that rate, too...and on and on.  I hope values to be higher in 2 years as right now the prop is probably barely worth the loan.

Anyway....read your docs and know exactly what your note says before you do anything.
  • October 02 2010
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Profile picture for the_country_hick
Interest only loans were basically designed to fail. There is no way most could afford the loan when it resets. 

Try the loan modification route. It is worth a shot even though the vast majority of those fail or are denied. Perhaps the best solution would be to pay extra each month paying the loan down. Then if you are very very lucky you would be able to refinance in time for the recast date.
  • October 02 2010
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Your best option is to contact your current lender and discusss your loan mofication options. You can try www.makinghomeaffordable.gov for further assistance and good luck.

  • October 02 2010
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Where do you live? When did you buy? 8% is high. You can try for a re-finance through a lender but because your value is low compared to what you owe, you may have to try for a loan modification. Just beware, and don't give anyone any money upfront. Good Luck!
  • October 02 2010
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