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Profile picture for Manuel Garr

What ReFi options are available when you're upside down on your mortgage, but you NEED to move?

Current listed value of our home: 85K
2007 ReFi appraisal: 138K
Remaining balance on mortgage: 99K

During a previous ReFi in 2007, our home appraised for 138K. Currently, Zillow lists the value of our home at 85K. However, Zillow nor the PVA include the fact that we have a finished basement. My wife did the ReFi in 2007 prior to us being married. I'm of the opinion that she was the victim of predatory lending because the terms are INSANE!! (High interest rate on an interest only loan). Anyway, we need to move and we'd like to ReFi to save money and invest it in fixing up the house so we can sell it. Can anyone tell me what options we have other than walking away or staying in the house?
  • January 23 2014 - Russell
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Answers (6)

I would see if your home loan is owned by Freddie or Fannie and then see if you can qualify for HARP like the others have suggested. If that route does not work out for you, then I suggest that you rent out your house. This has been a common option for people in your situation. They rent out there house to cover the costs of the mortgage payments. Either way, the best thing for you to do is to speak with a lender such as myself to see if you can get started on financing a new home. If you have any further questions or if you would like a loan, feel free to contact me.

Good Luck!
  • January 23 2014
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Profile picture for JustinLeffew
If it is in salable condition now, why not find a good Real Estate Agent and slap on a price you'd be willing to part with it for? An agent can help you come up with comparable sales to let you know a bit more about where you stand equity-wise. If the repairs are light as you stated, you can give seller concessions for the new buyer to repair. This is assuming the home is in good enough condition to pass an appraisal for the lender of your buyer. 

If there happens to be more than $2000 in repairs, check out a 203k refinance. This program will allow you to fix some things up and possibly increase the value. Heck, when you're done you may even want to stay there!
  • January 23 2014
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Profile picture for Manuel Garr

Thank all of you for your quick responses.

Allison,

I'm not sure about the selling price of other homes in our neighborhood. I know the homes on our street are valued (according to Zillow) more than our home is (the highest two are 114K). When factoring in the square footage of our basement, we actually would have more space than either of those homes. Thank you for your advice about the realtor. We've spoke with one about a year ago, but it would be a good idea to do so again.

How soon would we like to move? We'd like to move by the end of the summer (or sooner), but given that were paying about $300-$400/mo. more than we probably should (hence, us wanting to ReFi), it's going to take us a while to complete the few repairs/upgrades we'd like to make. So it's looking like sometime in the Fall/Winter 2014 into 2015 before we'd realistically be able to move. Total cost of repairs/upgrades isn't more than $2000.

Justin & Rodrigo,

We've already talked to 3-4 mortgage companies and they all confirmed that neither Freddie Mac or Fannie Mae owns our mortgage. So I know we don't qualify for a HARP loan. As for the value of the home, as Allison alluded to in her comments, after factoring in the value of the homes in our neighborhood, coupled with the fact we are one of the few homes that have a finished basement, I would guesstimate our house appraising in the low to mid $120's.


FYI, we're not trying to make any money in selling the house. We just want to get it fixed up enough to sell so we can move.

Again, any assistance you can provide will be most appreciated.

  • January 23 2014
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Zillow and PVA assessments aren't always that accurate, and they really won't be a determining factor on how much your home sells for. Are other homes in your neighborhood selling in a similar ballpark range? If they are selling for higher, you may want to speak to a qualified realtor and see how much they think your home could market for. It may be more than you think. How soon do you plan to move? If you're only planning on staying in the home a few more months, refinancing probably won't make that much sense, since your savings in interest probably won't outweigh the costs of the refinance. Just a couple of things to think about.

  • January 23 2014
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Profile picture for JustinLeffew
You will not be able to take cash out if the Zestimate is anywhere near your appraised value. You could potentially do a streamline refinance (HARP, FHA streamline, VA IRRRL) depending on your current loan. Talk to a reputable Loan Officer and let them take an application so they can let you know if you are eligible. 
  • January 23 2014
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I reccomend looking up to see if Fannie Mae or Freddie Mac own your mortggae.  Even though you get your mortgage statements from a "servicer" that may not be eithe of these 2 government entities, they may own your Mortgage.  Google "does fannie mae or freddie mac own my mortgage".  Once found it will require you to enter your personal info.  Good Luck.
  • January 23 2014
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