house is worth less than the loan and we need to refi. What now??

[bicyclemech1]

Our ARM is going up to the point where it is going to seriously squeeze our budget. We planned on refinancing, but our home is currently valued at 20-25% (my estimate) less than we bought for 2 years ago. What do we do now? (other than panick)

 

[afm199]

Talk to the lender and see what if any programs they are offering. You're not alone in that boat.

 

[rsrider]

Ride it out and get another job to pay for the house. If you have kids make them work as well. I'm sure housing values will go right back up in a couple of years and continue to increase until that's the only thing that anyone is spending their money on. I mean really, who the hell needs food, clothing, health insurance, car insurance, or internet access when you can have an honest to goodness house. Yes, something that has walls and a roof and you can spend the rest of your life in financial servitude to own. It's the fucking american dream after all.

 

[Cygnus]

Our ARM is going up to the point where it is going to seriously squeeze our budget. We planned on refinancing, but our home is currently valued at 20-25% (my estimate) less than we bought for 2 years ago. What do we do now? (other than panick)

When you got the loan, you had a fair amount of certainty that there would come a day when the rate was unbearable, and you had less certainty that the house would be worth more than you owed. What was your original plan for such a contingency?

 

[lefty]

Good luck Bro.. There are sooooo many others in the same boat.

The banks are willing to work with you to keep you as a customer. They do not make any $$ if you cannot make your payments, so it is in their best interests to work with you.

 

[Papi-C]

Grab your ankles. Why are you refi'ing? Buying a car or that great vacation!?

 

[BlacKat]

Pay the extra out of the 1 years worth of salary that you should have in savings.

 

[plumber]

Grab your ankles. Why are you refi'ing? Buying a car or that great vacation!?

His ARM is adjusting up. You must have missed that in his first 3 sentence post.

 

[mikev]

I love that all the holier than thous come in and slam on Greg because they're all totally financially secure and have no worries at all about money.

Hypocrites ftw.

 

[afm199]

Guy's asking for advice, not shit.

 

[Papi-C]

I love that all the holier than thous come in and slam on Greg because they're all totally financially secure and have no worries at all about money.

Hypocrites ftw.

I Don't have an arm or interest only or any of those other crazy things. I have a lo interest single mortgage. Not gambling FTW. Regardless the banks hould help the OP.

 

[rritterson]

Guy's asking for advice, not shit.

Seriously. Christ people!

I agree with afm- the first thing you need to do is talk to the lender, before the payments get hard to make, while your record and credit are fully intact.

 

[mikev]

I Don't have an arm or interest only or any of those other crazy things. I have a lo interest single mortgage. Not gambling FTW. Regardless the banks hould help the OP.

Congratulations for you. You're in the minority.

How is that relevant to the OP?

 

[Papi-C]

Congratulations for you. You're in the minority.

How is that relevant to the OP?

Read the last sentence.

 

[plumber]

Here's a site I was shown yesterday. Plug in your zip code and shows more than you want to know.

http://www.realquest.com/rq/default.aspx?indexPage=0&txtSearchAddr=Concord,+CA.

 

[fromeast2west]

Depending on how the market goes we may see some of the dumping that has been going on in other parts of the country.

In parts of country where values have really flipped, people in your situation are starting to use the good credit they have to buy a second house at the much lower current prices. They then move into the new house, stop paying on the old house, and default on the house with the upside down loan.

It ruins their credit for a while, but as long as they stay current on the new house, they are much more secure than they were in the over priced property.

I'm not saying I support dumping the loans, but the banks were all happy when they were raking in the dough, and they accepted the crazily inflated, comp only appraisals.

 

[cardinal03]

Talk to your lender ASAP. Just tell them the honest truth - you need every bit of help from them you can get or you'll have to default on your loan and they'll be stuck with trying to sell your house in this crappy market.

Going through buying a house right now, and part of me feels for you because it's your home and I don't want you to lose your home. Part of me is angry that people like you bought houses you couldn't afford and drove prices so high that I have to pay twice as much for my house today as I would have five years ago.

I'm not sure what kind of rate you'll be able to get. I locked in 6.5% on a 30 year fixed, no points, on Monday. Rates are changing every day. Good luck.

 

[mike23w]

There's 3 choices
1) work with lender to reduce payments
2) continue to pay current mortgage with no changes
3) walk away. Stop making payments and forfeit the house.

If I had no equity or little equity in the house I would walk.

 

[BlacKat]

Here's a site I was shown yesterday. Plug in your zip code and shows more than you want to know.

http://www.realquest.com/rq/default.aspx?indexPage=0&txtSearchAddr=Concord,+CA.

nice, on my little street there are 2 bank owned properties and 1 pre-forclosure. :mad

 

[iosgeek]

Grab your ankles. Why are you refi'ing? Buying a car or that great vacation!?

Seriously dude, the OP is in trouble like 1032043904320 of other people that made a bad decision which may not seem so bad when it was made. Why kick someone when they are down? If you don't have advice to give him why not just not say anything instead of making a smart a** comment?

I love that all the holier than thous come in and slam on Greg because they're all totally financially secure and have no worries at all about money.

Hypocrites ftw.

:thumbup

Guy's asking for advice, not shit.

:thumbup He's not alone, I worked in the industry and those negam loans had 20% of cushion as the banks didn't really think prices would slump as low as they did.


All the negative arm loans they were funded year and half, year ago, had calculated risk of 20% incase the borrower is not able to make the payments when it adjusts.

Now OP, you can call your lender and present your situation to them and I am pretty sure they would be more than happy to work something out for you. PM with banks response if you like or with any other questions you may have. I will do all I can to help and my past experience in the industry would allow me to atleast point you in the right direction.