Prefer to talk in person? Find a mortgage specialist on Zillow
Profile picture for jschnyderite

Refinance Underwater - 800 Credit Score

I found a great rate with a local bank.  The problem is I think I will be between $2000 and $10,000 underwater on my loan, depending on how my appraisal goes. 

Some background:
I bought my home in July of 2009, it is not owned by Freddie Mac or Fannie Mae.  It was purchased for 175,000 and owe 156,000 now.

Some questions:

Does a new lender have room to bend for someone with with a great credit score and perfect mortgage payment history?

I tried a streamline with my current mortgage holder and they said PMI doubled so it wouldn't be advantageous (I currently have 5%), can another lender streamline my current FHA, or only the one that currently holds the loan?

I don't think I qualify for HARP (missed the cutoff by a month).  Are there other options?  Can lenders bend on that?  If they can, if I have my current lender sell my loan to one of the big two, can I still apply, or does the loan need to be owned by them IN 2009?

Any other suggestions/options to try?  Need to lower my payments.
  • November 10 2011 - Hillsborough
  • 0
    0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Be a Good Neighbor. Be respectful and on-topic. No spam or self-promotion! See our Good Neighbor Policy.

Answers (8)

You would not qualify for Harp because you have an FHA loan. Your lender was correct in saying there is not advantage to refinancing because even though the rate can be lowered the doubling of mortgage insurance offsets the savings. If you can get an appraised value of $160K and can afford a higher payment, then have your lender show you an FHA 15 Year option.
  • November 10 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Underwater means the house is worth less than the unpaid balance. First think I would do is get a thorough Market Analysis from a professional realtor. Determine what your house is worth. Then You can decide which direction to go. If You modify, it will have to be through your current lien holder. If You refinance, a good mortgage broker might be an option for You to get options from many institutions.
  • November 10 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Listen to Clay and completely ignore MarKus as he has no clue what he is talking about. I'm pretty sure you already know what the term "Underwater" means and were not looking for a definition.
  • November 10 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for sunnyview
Newsflash coming in hot off the wire.....Clay is a lender......MarKus is not......Clay knows what he is talking about.....MarKus.....
  • November 10 2011
  • 1Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for jschnyderite
I can not afford a higher payment.  I can not really even afford my current payment.  After a town assessment and a raise in taxes, my monthly payment has gone up $200 per month in a snap.  That is why I am trying to refinance into a lower payment.

There must be other options for someone with a immaculate payment history and 800 credit score..no? 

Is there a way to modify into something else and then qulaify for HARP?

Can I try to streamline with another lender that may be more willing to work with me since they don't already control my loan?

Are there other programs that can help without killing my credit?

Would lenders bend to get me into a conventional loan since I have great credit?
  • November 10 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Unfortnately have a FHA really limits what can be done for you.  While it is great that you have excellent credit, without the value no lender is going to touchthe loan.  Did you put the standar 3.5% down when you bought your home in 2009?
  • November 10 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

Profile picture for jschnyderite
I put down 10,000 - 12,000..somewhere in that ballpark
  • November 10 2011
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.

I am not sure of the complete details of your loan property, but you might want to look into doing a streamline now. Your MI rate would be higher, but you would be able to cut your rate by over a point now. 
  • February 01 2012
  • 0Yes

  • Report a Problem

    Please enter a valid email address.

    Content flagged

    We will review this content. Thanks for helping make the site more useful to everyone. To learn more, read Zillow's Good Neighbor Policy.

    We're sorry. This service is temporarily unavailable. Please come back later and try again.