Any creative ways to refinance an upside down mortgage?

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Any creative ways to refinance an upside down mortgage?

Postby dsanders79 » Wed Jan 30, 2013 11:33 pm

I currently owe ~$169,000 @ 5.125% on my house. I have a conventional 30 year mortgage that is owned by Freddie Mac. Unfortunately the mortgage originated in July 2010 so I do not qualify for HARP. I already tried to refinance but the appraisal came in pretty low and I am underwater. Right now my plan is to put in some sweat equity, wait for the housing market to recover a bit and hope interest rates will still be low when that time comes. I have accepted that this is my probably my only course of action, but I wanted to put my situation out there to see if anyone had any ideas for me. If I had only found these forums before I purchased my house :(
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Re: Any creative ways to refinance an upside down mortgage?

Postby lindisfarne » Sun Feb 03, 2013 10:27 pm

dsanders79 wrote:I currently owe ~$169,000 @ 5.125% on my house. I have a conventional 30 year mortgage that is owned by Freddie Mac. Unfortunately the mortgage originated in July 2010 so I do not qualify for HARP. I already tried to refinance but the appraisal came in pretty low and I am underwater. Right now my plan is to put in some sweat equity, wait for the housing market to recover a bit and hope interest rates will still be low when that time comes. I have accepted that this is my probably my only course of action, but I wanted to put my situation out there to see if anyone had any ideas for me. If I had only found these forums before I purchased my house :(


You may not be eligible for HARP but are you eligible for anything else?
I'd go to http://www.makinghomeaffordable.gov & use the number there to talk to one of their advisors.
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Re: Any creative ways to refinance an upside down mortgage?

Postby bdpb » Mon Feb 04, 2013 12:39 am

Borrow against equity in your car from PenFed at 1.5%.

Withdraw Roth contributions tax and penalty free.

Withdraw and pay tax and penalties on 529, HSA, IRAs.

Get a second job.

Cut spending significantly. Rice and beans or Ramen noodles.
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Re: Any creative ways to refinance an upside down mortgage?

Postby jon-nyc » Mon Feb 04, 2013 3:06 pm

At 5.125% its probably worth paying it down to get it above water in order to refinance. These days that's a pretty high rate.
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Re: Any creative ways to refinance an upside down mortgage?

Postby dsanders79 » Mon Feb 04, 2013 3:20 pm

jon-nyc wrote:At 5.125% its probably worth paying it down to get it above water in order to refinance. These days that's a pretty high rate.


I am currently planning to max my 401k this year. Should I reconsider that plan and pay down my mortgage instead (still contribute to the company match)?

I do get a little extra income from contract work that I will be throwing at the mortgage.
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Re: Any creative ways to refinance an upside down mortgage?

Postby midareff » Mon Feb 04, 2013 3:42 pm

dsanders79 wrote:
jon-nyc wrote:At 5.125% its probably worth paying it down to get it above water in order to refinance. These days that's a pretty high rate.


I am currently planning to max my 401k this year. Should I reconsider that plan and pay down my mortgage instead (still contribute to the company match)?

I do get a little extra income from contract work that I will be throwing at the mortgage.


It seems these days that much lower rates are out there for the taking. I'm getting ready to close a 30 refi at 3.0% with 25 basis points. I think 3 1/4 is still out there. On 160K that would be a reduction of $185.78 a month.
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Re: Any creative ways to refinance an upside down mortgage?

Postby Easy Rhino » Mon Feb 04, 2013 7:51 pm

are the home payments currently a large (31%+) proportion of your monthly gross income? you may be able to get a modification.

There could be a few lenders who will refi an underwater property, although without it being HARP it might be tough. Might be one of those situations where a mortgage broker would be useful.
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