Angie asked:
To make it a little more simple…
To make it a little more simple…
My friend bought a home for $900,000 with a low 2 year yr fixed rate. Like the usual scams, after those 2 years his monthly payment went up to the point he couldn’t afford it anymore. So now he has to leave the house..
Wha I was wondering is, if he can refinance it for a 30 yr fixed??or any suggestions?
His loan amt: ~ $950,000
Home value~ $800,000
is he eligable to refinance for a fixed rate , or will it be better to let go??
SALVADOR
LEONARDO
Adjustable rate mortgage loans are not “Scams”. They are intended for those who would purchase the home and “get that raise”, “get that second income”, “fix and flip the home”, and any other reason to hold on to that loan for a short time. It was never meant for the buyer to have the loan for a long period of time.
That being said, in order to do a refinance and the appraisal comes up short, the person refinancing would have to come up with the difference. Either that or come up with some type of $150K improvement(s) to the property.
Comment by Jäger — January 8, 2010 @ 9:54 pm
ROB
The only way to call it a “scam” would be if the lender didn’t disclose to the buyer that he had the right to have his documents reviewed by an attorney. If this is the case, he shold speak to an attorney now to see if he can file fraud charges against the lender. If your friend waived the right to an attorney review, he was saying he understood what he was signing and agreed to those terms.
Yes, the home can be refinanced for the current value so long as the owner can cover the balance owed on the origional loan. So he needs to come up with $150,000 in cash to make this happen.
Comment by Dizzy_Lizzy — January 10, 2010 @ 9:31 am
JOHNATHON
i think you can if you go to this website an file out the form thay well be fiting over you to do
Comment by brianpalmero — January 12, 2010 @ 7:44 am
WILFORD
He could refinance if he can pay off $230,000 to bring the loan to 90% LTV.
If you were a lender, would you lend a person an extra $150,000 more than his house is worth?
You wouldn’t be in business long if you did that.
There was no scam to his loan–he knew it would rise after 2 years. He’s just caught in the pinch, as the housing bubble deflates. He probably lied a little about his income, too, to get that loan.
Comment by argybargy — January 14, 2010 @ 9:26 pm
REINALDO
He’s in trouble either way. Was the mortgage a scam, no, but that’s an entirely different subject. The problem your friend is in right now is not that different from thousands of others. He cannot refinance since is loan to value ratio is well over 100%, if he walks away, he’s damaged his credit for at least 2-3 years. Maybe he has assets he can use to put down to get his LTV down. The only other suggestion is has your friend called the lender to discuss the situation?
Comment by Jeromy W — January 18, 2010 @ 12:42 am