Should we refinance

[lryan361]

We moved to Florida 16 months ago and are planning on moving back to Iowa. It is not what we thought. We sold our home in Iowa and the market was starting to fall. So we didn't make a lot. We bought a home down here because everyone kept saying the market was going to go up fast. Big mistake. But now we have bought a home for 159,000 and we have it on the market for 168,900. We have an 80/20 loan and the 20 loan has gone up to 10.5% and the 80 at 7.95%. Our payments are 1650.00 and it is killing us. We have depleted all our 401(k)'s, savings, etc. We are wondering if should refinance. We have 6,000 left in savings and know that that will take up the cost of selling our home and moving back. We are really in a mess and very discouraged. We don't want to foreclose on our home. And are even going to get second jobs to help. We have received a lot of flyers in the mail wanting us to refinance. Can we do that while it is for sale? Also we'll this put us deeper in the hole? Our 20 loan has a 5% early payoff also. Any advise would be greatly appreciated. We are desparate. Thank you

[TJ2007]

Sounds like you would likely eat up all the equity you have left in costs and penalties if you were to refinance (and believe me I am not one to sell myself out of a deal!). This is going to make is virtually impossible to sell, at least without more money out of pocket and god forbid you got another prepayment penalty.

If you really need to get back to Iowa now it may not be the best option. But then again with the way the florida real estate market is right now you may not be able to sell your home for quite a while anyway (am not sure what area you are in)

There are better rates out there that may save you some money, but if you have had any late payments on the home or other credit you may not qualify for those.

You would have to SIGNIFICANTLY lower your rate and probably be willing to hold on to the home for a while for it to pay off.

Perhaps you would be better off renting it out and moving somewhere cheaper in Iowa if the numbers work out?

Just beware of the many investors in florida who will say they can help you avoid foeclosure, there are a few good ones, but more horror stories...

[andrew2007]

So you have both loans which were ARMs and rates have adjusted and now are quite higher.

Are you aware of equity position of your house? Is $168,900 its current value? What response are you getting on refinance options from lenders?

Both mortgages are still current so refinance is quite possible.
Can we do that while it is for sale?
Before a lender would agree to refinance he would ask for the house to be taken off the listing.

Our 20 loan has a 5% early payoff also. Any advise would be greatly appreciated. We are desparate. Thank you

For how many years is the prepayment penaty? Normally its 1-3 yrs.

[lryan361]

Wow, I read this post and thought boy has a lot changed since January 2007. First of all, we ended up getting a new realtor in May 2007. Our first kept lying to us about alot of things. We got a realtor who is one of the best know in Charlotte County Florida. When she assessed it by May of 2007 we put it on the market for 154,900, then three weeks later to 149,900. No lookers at all. We held at 149,900 then dropped to 144,900 and now are at 139,900. Our savings is totally depleted. Even with cashing in all our retirement this wouldn't be enough to pay off all the loans. So she suggested a short sale. We have talked to the 1st and 2nd lendor. The first brought in their own realtor two months ago and they won't tell us the exact amount but probably in the 140,000's. We have sent in our check stubs, hardship letter, and last two bank statements. Now at 139,00 which we dropped on July 30th still not one looker. The neighborhood is going downhill because people are moving out and renting. Most around us are 2/1's but our is a 4/1 with a pool. We have two empty homes on each side 2 are rentals whom the renters were horrible and just recently evicted, 1 is for sale and 1 is a snowbird who is here 3 weeks out of the year. Across the street two empty homes 1 for sale and 1 for rent. We bought this house to fix up and then sell in 2 -3 years. We have done a lot of work and it is really very nice now. We are going to do a drop again to 129,900 but if that doesn't work we may have to foreclose. I have been reading about in lieu of deed... which I am going to check into. We haven't been late yet but see that will happen starting this month. We are each working 2 jobs and this has taken quite a toll on our marriage. We feel as if we are going to lose everything and don't want to see our marriage go down the tubes too. We have a 12 y/o at home and this has been very hard on her too. So we are at pretty desparate measures now and honestly not even sure where we should go from here. Our realtor is advertising the heck out of it but hasn't really given us a lot of feedback except to keep dropping until we get traffic and talk to our lenders. Any other feedback would be greatly appreciated. Renting it out is impossible because you would never get the 1750 payment for rent. Also we got our contract out and in the fine print it states in January 2008 it will go up 300.00. Now that the house is work at least 30,000 to 40,000 less than what we paid we think even waiting it out for 10 years it may not recup the value. Quite a mess. :confused:

[TJ2007]

Personally I would suggest you dont sink anymore money into the property if you know you cant hold onto it. You will be in a lot worse situation if you have no home AND no savings or money in the bank to go somewhere else.

There are many many many people on the same situation right now. At least you seem to be being proactive and trying to address the situation early.

Obviously you dont or cant put in the money it would take to sell the property and come out even.

So personally I would suggest you definitely discuss with your lender the Deed in Lieu of... maybe your best option.

Also keep aiming for a short sale, however they can take a long time and is never guaranteed they will close in time.

Keep as much money in the bank as you can..

[Lenderles]

[quote=lryan361;13883]We moved to Florida 16 months ago and are planning on moving back to Iowa. It is not what we thought.

I think it was what you thought, You just talk to the wrong realtors, Investors and Mortgage Lenders. If you look at your HUD1 when you bought your property you will see who made all the money. 16 months ago appreciation was excellent if you did your due-diligence (Home work) and bought the right house in the right area you'd be sitting pretty good right now. Most investors wont pay 150+ for a house unless they see other activaty to were they will get a large return on the money.

I only see two options now:

1. Deed in Lieu.

2. Save your money, hurry and buy in Iowa.

this way when the worst does happen you will have a house to live in and not a apartment. Then you can wait the 3 year foreclosure period that lenders require, Before you can buy a home again remember Deed in Lieu still shows on credit as a negative mark and it will stay there for 7 years. Sub prime lending is pretty much gone.

You can check the Iowa News paper on sunday in the housing section and find a seller who's doing the financing. He might or might not require a large down payment. But, this way you wont have to credit qualify.