I currently have two mortgages, a 1st of $279k and the 2nd of $98k. I have an ARM on the 1st which just adjusted for the first time since getting the loan three years ago. Details of the ARM are: Index-5.13, Margin- 5.50, Original Rate- 6.625, Cap- 1.5. With this, my ARM just adjusted to 8.125 (the cap vs. the margin), so thankfully not to 10.625 [per the loan co]. I just attempted to refi, but ran into the issue of the house value. I refi the 2nd 2 years ago, and the appraisal came back at $423k. My property tax assessment came back at $420k for this year, but the appraisal I just had done came back at $362k, which is obviously less than my current 1st and 2nd combined, or $377k. I was shocked to see an almost $50k drop in value. Does anyone have any suggestions how I may be able to get out of this? Never any late payments, my credit is good, the refi was all set to go thru until the appraisal came back. I am worried come June 08 when the rate is scheduled to reset again.
2007-12-05 00:37:25 · 6 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
About the only thing you can do is contest or appeal the appraisal.
2007-12-05 00:49:02 · answer #1 · answered by Bostonian In MO 7 · 0⤊ 1⤋
The problem is that you are trying to create income from your primary residence and living on more income then you generate. Why did you NEED to do the refi 2 years ago and where did that money go? A house should NOT be used as a piggy bank to "keep up with the Jones" and if you have spent everything you earned as income AND spent 98K that you pulled out of the house then you have a BIG problem.
You should have KNOWN that this was an adjustable morgage, should have KNOWN that there was a risk of your payments going up and yet you still have pulled extra money out of the house by getting the 2rd. AND NOW you want a solution to the problems that you have created???
FIRST soulution is to quit spending 110% of what you make every year. IF you want to save the house then do you have ANYTHING that you can sell to payoff some of the debt that you have put against the house? Since ou took out the 2rd, where is that money "invested"?? If you spent it on cars, can you sell the cars and repay enough of the loan to get the refi done AGAIN?
Spend some time learning how to manage finances and less time trying to spending any equity that you get in anything.
2007-12-05 10:27:21 · answer #2 · answered by Jerrold J 3 · 0⤊ 0⤋
Get another appraisal. An appraisal is an OPINION of market value. You can try to talk to the appraiser but he has market data to support his opinion so he probably won't change anything unless he missed something substantial. I would get three appraisals altogether. If this doesn't work out for you, I have great advice. First, never finance with an ARM again. Second, you bought more house than you can afford, I don't care what anyone else tells you. It would be a good idea to sell this home and purchase another home that has a monthly payment that is 25% of your TAKE HOME pay. Ideally with 20% down. The debtor is slave to the lender.
2007-12-05 10:24:16 · answer #3 · answered by kirk m 3 · 0⤊ 0⤋
You Should ALWAYS be wary of refi appraisals, they always come back higher than the actual value of the house. First try to contest the appraisal, if that fails then your best options are the contact the bank and ask for a loan modification agreement, which allows for modification of the loan terms without a refi, or if that fails and you really cannot make payments, start looking at short sale options, whereas the bank agrees to let you sell the house for less than it is worth. There are tax implications with that so you should seek the advice of a tax professional.
2007-12-05 09:18:51 · answer #4 · answered by Anonymous · 0⤊ 0⤋
Right now, all you can do is wait it out, hoping for real estate values to rebound. Until values rebound, you won't be able to get financing for the total amount you currently owe, since lenders are no longer making mortgage loans for more than the appraised value of the property involved.
2007-12-05 09:27:16 · answer #5 · answered by acermill 7 · 2⤊ 0⤋
My Step Brother had the same problem you have. But His situation may or may not be the same.
What he did was transfer the difference to a Credit Card, So the numbers came out on the House in order to get locked into a fixed rate. However, His debt to income ratio was pretty good so he could afford to take a little hit. Then once he had the house locked into a fixed rate he took out a HELOC to pay off the credit card.
2007-12-05 08:58:01 · answer #6 · answered by Ryan M 3 · 0⤊ 1⤋