How can you refinance you home when your underwater by 100k?

Posted on Oct 11, 2012 in HARP Refinance

Question by Sea: How can you refinance you home when your underwater by 100k?
And the mortgage company has denied the Obama refinance?

Best answer:

Answer by Rick B
You can’t. You will have to stick to your original agreement.

Add your own answer in the comments!

4avg.rating 26 votes.

8 Comments

  1. Maybe try a modification agreement not a refinance.

    Change terms in exchange for the points and fees upfront.

    Otherwise…not happening.

  2. There’s no way to refi unless you cough up a very large cash amount, that $ 100k, plus 20% of the home’s current market value so that your new mortgage is no more than 80% LTV.

    You signed a contract to pay $ X a month, so keep paying. Or lose your house. And if your lender does not get enough from sale of the house to cover the balance due, you have to pay if you live in a recourse state. Otherwise, whatever you borrow and do not repay becomes income and taxable. On that $ 100k, your taxes will run about $ 50k – maybe more by the time you calculate federal + state income taxes.

    Keep paying your existing mortgage, or you are you-knowed.

  3. Borrow $ 100k plus 20% of the value of the home from family, pay down the current mortgage and refinance.

    A bank is not going to want to take the risk on a home that unless the amount of the loan is at least 20% below the value of the home. That way, if you don’t pay, they can still sell the house below market and recoup their losses. That little trick is something they forgot about doing between 2002 and 2007.

  4. In this housing crises there are many houses that are no longer the same value as when you first purchased the property. Most properties in the United States depreciated in value. this is also called being upside down. You owe more mortgage than the house is worth.

    The immediate answer to your question is the bank would not approve a mortgage loan where the appraised value of the property does not exceed the loan amount by a minimum of 10%. Most refinance is a maximum of 20% below the appraised value.

    You might attempt a loan modification from your lender, that might change the terms of your mortgage loan.

    I hope this has been of some benefit to you,good luck.

    “FIGHT ON”

  5. you are not going to be able to refinance. best option is to sell the home and ask that the mortgage company accept a short sale.

  6. Bring the difference to the table in cash.

    There is no such thing as an “Obama refinance”. You mean a modification, which is in no way mandatory whatsoever.

  7. You simply don’t.

  8. You cannot, you would need to try a loan modification. There are no other options. Giving the bank $ 100K plus 20% would be foolish and a waste of money. If its your primary residence you probably won’t pay taxes on it anyways.