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Question:
FEB 23, 2012

Refi Loan Over 100% LTV

I need to refinance because I have a no-interest loan that is about to expire. What are my options?

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Bill's Answer: Bills.com Resident Expert

Since your mortgage balance is more than the value of your home, you may have trouble obtaining a conventional refinance loan, as most lenders are not willing to extend loans that exceed 100% of the value of the property.

However, if you are facing a significant increase in your interest rates, you should certainly contact lenders to find out what HARP refinance options are available to you based on your current financial situation.

The only way to determine whether or not you will qualify for a refinance loan is to apply for a loan with several different lenders and/or brokers.

Bills.com makes it easy to compare mortgage offers and different loan types. Please visit the Mortgage Refinance Quote page and find a loan that meets your needs.

Not only will these mortgage professionals be able to tell you whether or not your currently qualify, but if you do not qualify, they can tell you what aspects of your financial situation are causing you problems, and make suggestions about how to improve your chances to qualify for a loan.

If you would like to read more about mortgage refinance loans, I encourage you to visit the Bills.com Home Refinance Resources page.

If you enter your contact information in the Bills.com Savings Center at the top of the page, we can have several pre-screened mortgage brokers contact you to discuss the loan options available to you. You should also visit the Bills.com Credit Solutions page to learn more about credit, credit reporting, and ways to improve your credit score which should help you qualify for better loan terms.

I wish you the best of luck in finding a lender willing to work with you. I hope that the information I have provided helps you Find. Learn. Save.

Best,

Bill

Bills.com

Comments (3)


Ethan .
February 23, 2009
Frank gives two very good options. If you are committed to keeping the house, the lender will very likely consider lowering your rate (and payment) to make it easier for you to do so. It is in their best interest for you to keep the home and maintain payments. One last option is giving your lender the deed in lieu of foreclosure. This is commonly referred to as a "Deed in Lieu" and if you are convinced that you are ready to give up the house, it can be a very useful approach to avoiding a long and messy foreclosure process. Basically, you are handing the lender the keys to the house in return for the lender releasing you form the terms of the note. The downside, in addition to giving up your home, is that the lender may have the right to pursue the deficiency balance on the loan; so if you do go this route, be sure to discuss this with the lender before completing the deed in lieu process.
Frank .
February 23, 2009
You pretty much have it correct, there are no current loan programs that will work for your situation. Your options are as follows: A. Short sale the home B. Try to modify the loan with your current lender In your situation, the best thing you can do is call the Hope Now Hotline at 1-888-995-4673. Explain to them your situation and they will give you solid advice on your options. Note that the Hope Now Alliance was set up by a group of the largest mortgage lenders, in cooperation with the Department of Housing and Urban Development (HUD). Good luck and please let us know how you progress.
Scott .
February 22, 2009
This is a common issue. I have the same dilemma. There is a shortage of "guidance" on the web and it is a place where there are thousands of us that need a strategy. My rental property (purchased for $162K) went to a value of $225K and is now at $100k in value. If I am making my payments on the existing loan at 6%, it is a safer bet to the bank that I can make them at a new rate of 5%, and stop a bit of my bleeding. The probability of myself (or any owner or landlord) making that payment is greater on a the lower interest rate, yet there is no vehicle if the home value has fallen under the mortgage. Yet we know that in California (for example) this describes a large populous of residents. There has been all kinds of conversation about tightening of lending standards in the market. What does all this mean? Is the old 80/20 still available? Is the 105% of value still available? I believe the previous question was really - what are the vehicles and tricks we can use in this situation. Outside of "calling banks" what are the options available for folks in our shoes? SS
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