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can/should I refi from a conventional to a VA loan?

 I owe $230000 and its only valued @ $190000 Im paying 6.875% and about $185 PMI.Currently, my payment are $1950/mo PITI  My credit score is 800+, never late. Originall bought house as investment in sept '07...just before the bottom fell out of the market, so I'll be keeping it for a while to try to break even. Can I refi being underwater, as I am.....how does a loan mod effect your credit score? 
  • May 28 2010 - US
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Answers (3)

it was unclear if you still have this house underwater as an investment property OR have you moved into the home?

VA and FHA programs are specifically for owner occupied transactions.  Although your VA eligibility certificate may confirm up to 100% financing available, other factors may restrict your refinance.



since you are underwater, your best option is to speak with your existing lender and discuss modification options.
  • May 28 2010
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I just moved into the house thats underwater.   so, occupancy isnt an issue.  Will I be able to do a VA refi  with a LTV at 120% (at least). 

what effects would a loan mod have on  my credit

Thanks
  • May 28 2010
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A loan mod will almost certainly affect your credit negatively.  When you get to trial period, you will make a lesser payment (usually).  this is when the lender can mark you late.  You can try to make the full payment till the mod is completed, but then the lender will say why do you need a mod if you can make the full payment.

A mod is for hardship situations and not to be used as a cheap refinance.  In my experience, most lenders will negatively impact your credit.  But if it saves your home, and you want to keep it, does a couple of lates on your credit really matter? 

Good Luck
  • May 28 2010
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