Chosen by Asker

This isn't as dire as you think. First of all, keep some perspective. You have paid about $900 a month for the last five years for a place to live. When you consider the income tax deduction you got on the interest and property taxes, you probably were out of pocket about $750 a month. That's all. So, ask yourself a simple question: If I rented a similar place for the last five years, would I have paid $750 a month for it. If the answer is yes, then you are really no worse off than if you rented. You just rented money (in the form of this loan) instead of an apartment. Now, in answer to your question. If your equity is too low to refinance, there are a couple of ways to fix that. One is to voluntarily increase your payments and ask for them to be applied to your principal balance. A second is to make some lump sum payments toward the principal balance with money you get from some other source. A third is to talk with a realtor and get comps of similar properties to see if you can find something that appraises more favorably with your home. If you can find something that comps for $125,000 or more, you might have a chance at a refinance or modification. A fourth is to make improvements to your house to improve its value- this can be cost effective if you are good with tools and projects. Lastly, you can wait for the market to improve. You only need about a 6% improvement in the home's value, plus about $5,000 in extra principal payments to put you in a position to refinance. Look over your budget and see if there are ways you can send another $200 a month or so toward your mortgage. At least it will put a dent in things and help position you for a refinance. Also, if you are paying an interest rate above 6% on the interest only loan, it might be worth taking out a $10,000 loan from a bank or family member in order to pay this one down and refinance to another loan. There are some great, dirt-cheap rates out there on conventional 30 year loans right now. If you got one at 5.25%, it would save you about $100 a month and lock you into a low fixed rate.

by Lauren F

3 weeks ago

Asker's Rating: 

sorry don't know

by =- 3 weeks ago

Yes, you should speak with your attorney; because your mortgage contract may have some disclosures that are not legal. Your original mortgage contract will require you to pay off the mortgage in order to reapply. If your mortgage company will not let you out of your contract; you can always ask someone close to you who has good credit to buy the home from you and you can re-buy it from them through another lender, of course. You will however have to wait about six months to apply for a new mortgage. Just make sure that you get a fixed rate mortgage next time.

by flipho_3000- 3 weeks ago

I don't know who your lender is, but most are willing to assist you in keeping your home. You should talk to your mortgage company again. This time ask for the Loss Mitigation Department and the manager of that department. You must get pass the telephone operators and telephone receptionist. Some of the things a modification would do is #1 Change your current mortgage loan to a 30 or 40 year fixed mortgage #2 Refinance or roll your current mortgage loan to the current value as oppose to the value when you obtained the mortgage loan. #3 There are other programs that might be available to you. Get the manager or the Loss Mitigation Department to explain all your options. I hope this has been of some benefit to you, good luck. "FIGHT ON"

by loanmasterone- 3 weeks ago