Mortgage Question

Updated on April 08, 2009
G.S. asks from Westford, MA
8 answers

Hello,
Awhile back, to get into my house, I took out an interest only loan - I know - should have stuck with the fixed 30 year and tightened my expense belt at that point..but being a single Mom - i took chose to take this route for my daughter and I.....but now I am coming up to the end of that 5 year loan and i did not put much principal during theis period...of course, my house is not what it was worth 5 years ago either. Is anyone else in this situation?

What can I do next?

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D.N.

answers from Boston on

G., you didn't say how your mortgage would re-set at the end of the 5 years. Is it a balloon note, or does it turn ito a regular P&I payment? If the interest rate changes, what is the rate based on? You may be surprised to learn that the rate will be lower than it was 5 years ago. For example, if it is based on the 12 month treasury note average, then it will be lower! So you may not be in as much trouble as you think. On the other hand, if you are, here are the details of the mortgage rescue plan:
http://www.wisebread.com/details-of-obamas-mortgage-plan-... . I hope this all works out for you.

D.

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J.R.

answers from Springfield on

Hey I am in the same boat. We took out an arm loan. The first 2 years were fixed then went adjustable and it was interest only. Kinda stuck. Can't refinanace because the house is worth 165000 and we owe 185000. So we worked with out mortagae compnay to get it to a fixed reduced rate. Which is fine but it still interest only and doesn't pay any of the principle. So There is tons of help out there. The president has been working on this to help people out. So their talk to your mortgage company or try and find one of those companies to help you. I just threw away the letters that we got let me see if I can find them.......... Okay one is H.O.P.E. I don't know there number I couldn't find it in the trash. But the other one I have is....okay there is no name on it. it just talks about the governmental economic stimulus act of 2008 and if you have negative equity to call 1-###-###-#### or for more info www.govtrack.us/congress/bill.xpd?bill=h###-###-#### I hope this helps. We worked with our mortgage company for a temp. because my husband is looking for a new job and we maybe moving so didn want to refi now and then move. Good luck to you.

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D.K.

answers from Boston on

the value of our house went down 17 grand !!!! in just 90 days. go on line to your mortgage co and they will probably have an area where you plug in the price of your home, life of loan and it spits out the estimated value. Lao I would go to the library and get Suze Ormands book ASAP! Good luck!

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M.F.

answers from Pittsfield on

Actually the value of your property goes up about 10% every year. Just look at your annual tax statement to verify. And if you hire an adjuster to re-value your home it may be valued even higher. That means you have more equity now even though you haven't made any payments on principle.

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L.M.

answers from Boston on

G.,

I'm not in this situation but a friend of ours and her husband are mortgage brokerer's. Her name is Nicky Shargal and she would know more about these and where it is a good idea to refinance your house or not. Her email address is [email protected]____.com They are located in Davis Square Somerville.

Good luck,
L. M

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C.D.

answers from Boston on

You are right, you are probably not in a position to refinance into a fixed rate mortgage. I would call your mortgage company and ask if you have any alternatives. If the bank can't help you get into a better loan, talk to a Realtor who has short sale experience. A short sale is when you sell the house for less than the mortgage amount but the bank needs to agree to the deal and forgives part of the loan. So say you ower $200,000 on your house and you have an offer for $180,000. You ask the bank to forgive the $20,000 deficit of the loan. This does negatively impact your credit score but in some cases it doesn't affect it as badly as a foreclosure would. Short sales are a lot of work--you need to provide all financial documents to the bank and the Realtor and your attorney do a lot of work on your behalf to get the bank to approve the deal. So find someone with experience. Good luck!

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L.M.

answers from Boston on

If your mortgage is backed by Fannie Mae ot Freddie Mac you could qualify for a lower interest rate as part of the new regulations developed to quell the mortgage crisis. Of course you will need to have good credit. I would call your current mortgage company and see if you qualify. Thee are certain restrictions on how upside down you are on mortgage amount vs value, I think it is 105%.

I am a real estate agent and am running into so many people in this same situation. Some have been able to get into a much more comfortable loan situation with this program. I do short sales and find them to be a frustrating process so if you can avoid that I would recommend it.

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C.B.

answers from Boston on

Hi G. - YES - many people are in that same boat... As a Realtor, my best advice is for you to contact a mortgage lender to see if you qualify for one of the new programs out there.

As of April 1, some properties can be refinanced without an appraisal (meaning that the bank doesn't look at today's value, but your payment history, etc instead...)

I've been in the business of real estate for over 25 years and have some great contacts in this area. If you would like to email me privately, I'll be happy to share names and numbers that might be helpful for you.

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