Question : How can you refinance a mortgage with no equity?
There are programs for people to refinance loans if they are having financial problems, but what about the rest of us? Are there limits placed on how much you can refinance?
- asked by Ramona
All Answers:
Answer #1
First contact your mortgage company.You will haveto prove financial harship.They will review yourcase and perhpas re-fi you.If they refuse to workwith you there is a government agency that willhelp you:Making Home Affordable .orgThey willcontact your mortgage lender after you have triedand perhaps help you./
- answered by Judy
Answer #2
Depends on the type of mortgage. If you have anFHA loan, you can do an FHA "Streamline Refi."
- answered by Caveat Emptor
Answer #3
Lenders are in the business of making loans topersons that will make their payments on time,often securing that loan with a legal right totake certain property if the borrower does notmake their payments as agreed. In a home mortgagecase, the borrower agrees to make payments on timebut also agrees that the lender may take ownership(foreclose) of the house if the agreement is notmet.Borrowers that have equity in their home,meaning that their home is worth more than theyowe, probably will not risk losing the value thatthey have built up in their home, and willtherefore work harder to make their payments ontime.Borrowers that do not have equity have verylittle to lose if the home is taken back by thelender, and are therefore a much higher risk tothe lender.Because of the higher risk, borrowerswith no equity will have to pay a higher interestrate, but financing can probably be found. Because you asked about refinancing, though, itmay be assumed that you have an agreement with alender already. If you want to refinance becauseyou want a lower monthly payment, ask your currentlender what they might be able to do for youbefore going to an entirely new lender. Yourcurrent lender knows how well you have been makingyour payments already, and if you have held upyour side of the agreement, your lender willprobably be able to restructure your loan toprovide a lower monthly payment. If you have beenbad at keeping your agreement, though, don't tryto hide from your responsibiltity, because thelenders all "talk" to each other through yourcredit score. Honesty and integrity are alwaysthe best choices.Best Regards,GrandpaFrankIndianapolis
- answered by Frank
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