gregorygarver.com

WH · Joined: 22 Sep 2007 Posts: 4

My mortgae broker told me I do qualify for the new FHA program but he cannot put the deal through becuase my house value is more than the mortgage. Also, the prepayment penalty added into the loan makes the situation worse. I need advise because I do not want to default on my payments to mess up my credit. I called the company I make payments to for a loan modifications but they told they are only servicing the loan and until I'm deliquent they will not help. The prepayment expires in March.

jasoni · Joined: 12 Dec 2004 Posts: 7

Can you get a second job until March to deal with the rising payments? That is what I would do to earn the difference in the loan amount and the value of the home in the meantime.What about selling some stuff - like any cars with car payments? Any other assets you have - like $$ in savings (NOT in retirement plans) that you can use to pay down your loan balance? Have some garage sales - get on a budget.I have seen how this ends and it is not pretty - at least you recognized the problem before it becomes a complete nightmare - you can still do something about it.try http://www.daveramsey.com for additional information and some free forms, etc. to get you back on the right financial track.FOR EVERYONE ELSE - if you cannot get approved for a convential loan and you don't have 20% in the deal - you cannot afford the house.

JamesM · Joined: 07 May 2004 Posts: 8

if you have good credit, why do you have a mortgage with a prepayment penalty? How much is the penalty?How much will you save per month by refinancing?Does the old loan reset the interest rate by March?How much are you upside down?

JamesR · Joined: 05 Sep 2005 Posts: 4

I don't understand ... if the house value is more than the mortgage, that's a GOOD thing and should be easy to do. Check this website http://WeFixRates.ComYou can qualify for the FHA secure program up to 97% and there are other programs that will refinance you fast and easy with good credit.

iggy_68 · Joined: 19 Mar 2006 Posts: 7

Okay, so the real issue is that you're upside down and have a pre-payment penalty.First off, if you've got good credit, why are you in a loan with a pre-payment penalty? Did you have to accept it to get approved because you were trying to buy a more expensive property than you could afford? If so, your loan person should have advised you on the risks of that mortgage. Either your loan person actively went out of the way to hose you, or they failed to advise you of a dangerous situation. Now ask yourself, "What reason is there to suppose they will do any better this time?" The answer is, "None, because if I really qualified, he could put the deal through." Qualification deals with the whole situation, including loan to value ratio. Chances are it's time for a new loan person.Now the good news is the penalty expires only a few months down the line. It is likely to be worth it to wait until then, and do anything it takes to stay current not only on your mortgage, but all other debt as well. You can start the application process a few weeks ahead of time, so long as the loan isn't actually paid off before the expiration date.Upside down is a rough situation to be in, if you need to refinance or sell (If you don't need to do either, it's not a concern). Here's an article on things to try:http://www.danmelson.com/2007/06/refinancing_when_youre_upside.htmlNone of them works universally, but there isn't enough information about your situation to make a more focused prescription.(btw, I just double checked with my wholesalers at two major lenders - none of the new FHA programs handle upside down borrowers)Finally, I need to ask: What makes you believe you'll be able to afford the payments on any refinance? Rates now are higher than they were two to three years ago, when you would have gotten your loan. Unless you come up with the cash to pay some serious points, you're still going to end up with something in the sixes (6% on $200,000 has a payment of just under $1200, plus you're going to pay PMI in the current environment to get the loan. This doesn't include taxes or insurance or any other cost of housing). There just aren't any magic wands to make mortgages cheaper in terms of real cost. It is entirely possible you may be better off considering a short sale.

SundA · Joined: 01 Aug 2004 Posts: 3

If you owe more on your home than what it is worth, there is nothing you can do until the Market value goes back up, if it does in your area. Also, the main criteria for a modification are equity and credit. If you have good credit but no equity, they are still unlikely to refinance it for you. I'm sorry to be the bearer of bad news, but it is highly unlikely a mod will occur, although I do wish you the best of luck with it and hope I am wrong.

Joshua · Joined: 29 Jul 2007 Posts: 4

I'm a Mortgage Banker and I can help you with this. What state are you in?abrock@fcmdirect.comFirst Capital Mortgagewww.fcmdirect.com