I made the wrong decision to refinance about a year ago in to a 5 year adjustable. I wanted to get out of it but when I told the lender I wanted to cancel the deal she assured me that it was a good loan and that I would be able to refinance again when the rates go down and my credit is better. Now since the market is the way it is. I'm worried that I will not be able to refinance and I may lose my home. My credit score is between 640-650 and since the market has went down I don't think I have very much equity if any. Am I doomed??
2007-09-28 00:43:00 · 14 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
there are programs that you can to 100% loan to value...or the FHA you can do up to 97.75% .
Their rates are low right now.........but you might have a lower rate then today's rates....at least it's fixed for 5yrs!
2007-09-28 02:12:12 · answer #1 · answered by Anonymous · 0⤊ 0⤋
DON'T PANIC!!! You are fine, and if it's fixed for 5 years, it's not a subprime loan. Subprime adjustable loans are only 2 or 3 year adjustables (like 2/28 or 3/27). Just because the market is the way it is does not mean it will be that way in 5 years. And right now, the adjustable rates are HIGHER than the fixed rates. How low is your rate? If you are in the 5's or low 6's you are going to waste your money on closing costs when there is nothing wrong with the loan you have now. I'm sure there was a reason you chose an adjustable rate over a fixed rate, like maybe you didn't plan on living in the house for more than 5 or 10 years.
Don't call a bank or loan officer and ask them if you should refinance, they are on COMMISSION!!! Of course they're going to tell you to refinance!! People have no ethics in this business anymore. Contrary to popular belief, bankers are not paid a salary either!
If your rate is in the 8's or higher, you might consider going to a fixed rate now, because that's the only way it would be worth it. 640-650 is not A+ credit, it's considered B credit. It usually means you're using too much of your available revolving debt, or your just making minimum payments on the closed end debt you have and the balances aren't going down quick enough (like the mortgage you just took out last year). Just relax, pay down your bills as much as you can, and don't waste your money on closing costs that are not necessary.
I hope this helps!!
2007-09-28 09:55:33 · answer #2 · answered by Shawna Marie 3 · 0⤊ 1⤋
The worst thing you can do it panic and do something that you may regret later. Take as much time as you need to think things through. First it sounds like you still have a few years before that loan adjusts. Take that time to make a new plan. If you were to try and sell now, you stand to lose more than you can afford. Sit tight watch the market, we all believe it will turn around soon and then you can begin to research loans that would work better for you in the long term. Making haste in these circumstances will only cause you heartache. So take a deep breathe and try to relax, you have time.
Oh and don't use Internet lenders! Only use local lenders who have been in business a number of years.
2007-09-28 09:00:56 · answer #3 · answered by Alterfemego 7 · 0⤊ 0⤋
Your lender gave good advice... you got a great rate and payment with this 5 yr ARM, and now you have 5 years to get your credit scores up and qualify for the best rates out there. What has you so worried? You are listening to all the bad news and it has you anxious? but why? you have 4 years to pay your bills on time, save some money each month, and maybe even increase your equity a hair.. maybe not. But so what, why would you lose your home? http://www.choicerealestate.net/
2007-09-28 10:31:56 · answer #4 · answered by Anonymous · 1⤊ 0⤋
Quit worring about your loan. You have 4 years to clan up your credit and by that time this real estate nightmare could be over and done. the loan you have is a 5/1 and not going to explode after 5 years, just become an adjustable. Calm down and make all your payments on time and clean up your credit. In a year or two you can do something about the loan, or once you have a 720 FICO.
2007-09-29 01:40:47 · answer #5 · answered by Patrick G 4 · 0⤊ 0⤋
I hate loan officers like that...she did NOT KNOW the rates would go back down...no one does, and many people are now paying the piper.
If you have a 5 year adjustable, your rate should be FIXED for FIVE YEARS.
Why would you want to refinance now? Don't make a panic decision....your payment shouldn't change unless your property taxes go up, and I would wait at least 3 years before I considered a refinance.
2007-09-28 09:00:08 · answer #6 · answered by Expert8675309 7 · 0⤊ 0⤋
Don't panic. You have another 4 years to wait for the market to correct itself. If I were you I wouldn't refinance now just hold onto your low rate for a while and wait for home values to go up a bit. Why waste the little equity that your home has gained if there's no need? If you are insisting on refinancing we can't really base your new rate on your credit score alone. How's your mortgage history? Are you making your payments on time? Do you have a ton of high payments versus what you earn monthly?
You can't lose your home as long as you keep making your mortgage payments on time! Take a deep breath and enjoy your weekend!!!
2007-09-28 11:39:39 · answer #7 · answered by glitterdiva 3 · 0⤊ 0⤋
Don't panic. If I understand you, your interest rate is low and will stay low for another 4 years or so. It's way to early to predict what the mortgage rates will be in 3-4 years. So if you have a low fixed rate and will keep it for 3-4 more years, don't change it now.
Another factor to consider is whether you have a prepayment penalty, which many subprime loans did have. So if you pay off your loan before the prepayment penalty period is over, you will lose money (and so you will have to borrow more money to cover it).
Finally, if you make your payments on time, you will be improving your credit score more and more as time goes by.
2007-09-28 08:18:26 · answer #8 · answered by AnOrdinaryGuy 5 · 0⤊ 0⤋
No, you are not doomed. Sit tight and if rates do ease in the next year or so because of the fallout of the housing crisis look carefully at the fixed rate options that are available to you. Look at all the costs involved and make an informed decision at the time. You have time on your side, you are more fortunate than most.
2007-09-28 10:36:10 · answer #9 · answered by Christiane 3 · 0⤊ 0⤋
An adjustable rate mortgage is definitely not a good thing to be tied into. They are part of the reason why there are so many foreclosed homes in the country. I personally work with a financial firm that specializes in helping families get out of dept sooner and helping them navigate into a better financial situation. If you would like, I could have some one contact you to better analyze your situation.
2007-09-28 10:11:17 · answer #10 · answered by Freedom 1 · 0⤊ 0⤋
Not at all. Your credit score puts you on the prime side (just) of the border with sub-prime borrowing. Look for a lender who will offer you a fixed-rate mortgage to replace your adjustable one. Then do the comparison of the costs of staying with what you have got to the costs of switching.
2007-09-28 07:55:41 · answer #11 · answered by Paul M 3 · 0⤊ 0⤋