How To Refinance Upside Down Mortgage: How to Deal With an Upside Down Mortgage
Refinance mortgage business is in full swing, due to the current recession. Those who have excellent credit should be taking every effort possible to get in on the savings that is now available. Mortgage rates are extremely low and you can save literally thousands of dollars right now. Mortgage rates are low due to the value of the U.S. dollar and the current mortgage foreclosure rate. Currently the mortgage foreclosure rate is at an all time high. So many folks were led to sign up for sub-prime mortgage loans a few years back and this has driven the foreclosure rate out of site.
Sub-prime mortgages are designed for short term lending and you hopefully can afford a much larger home for the initial purchase and then later, hopefully, you have either decided to move or refinance to a fixed rate mortgage once your property has appreciated in value, allowing you to refinance using the market value of your home to offset refinancing costs. Unfortunately, the real estate forecast was not expecting our economy to take such a sour turn. This has caused otherwise good credit worthy homeowners to be upside down in their home’s equity.
We will need to negotiate with your existing lender to get them to agree to a short payoff. Not just anyone will qualify for this, of course, as we will need to demonstrate a need based upon some level of hardship. It’s important that this short payoff include both the first and the second mortgages and have a loan to value of approximately 95% of current appraised value.
One way to hedge your mortgage situation is to offer incentives for a buyer to purchase your home to avoid foreclosure and ruining your credit. If you throw in a car, a boat, or maybe an RV, then a potential buyer will choose your property to buy over other homes in the same area or price range. Folks these are tough times and being smarter than sentimental is the right choices to begin making.
Understanding the process and managing your expectation during this process will not only keep you sane but will keep those helping you sane as well. My best advice is to assume it won’t happen and if it does BONUS! Short sales can also be done in this manner as you can sell your home for less than what you owe and then turn around and buy another home without an issue.
Learn more about Obama Mortgage Relief Plan Qualifications.
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