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Old 10-11-2012, 08:47 AM
 
Location: Brandon
75 posts, read 214,463 times
Reputation: 34

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Good morning,
I have a condo that is way underwater. I can refinance under harp 2 through quicken loans that is working with my lender- Green Tree. I owe $91,934 bought in September 2006 for $140,000.00 at 6.875% 30 year fixed rate, worth about $60,000 today. I pay $975 a month for my condo mortgage, hoa and escrow. Rent for $925 a month. So lose $50 a month.

I'm trying to cut down on my losses. I can't short sale or foreclose because I pay my debts.

I have 23.4 years left to pay.

I got a refinance quote for a 30 year at 4.5% interest rate with closing costs at $3,358. This will bring my monthly payment down to $787.

20 year refinance at 4.25% with closing costs at $3,500. Monthly payment to $890.

15 year at 3.99% with closing at $3,800. Monthly $1,000.00

These rates seem high to me, but since the property is now a rental property I think I have to go through my lender.

I have a house too now that I owe $73,395, bought for $145,000 at 3.75% 30 year loan. Monthly payment of $872.
With my house could I get a home equity loan to pay off my condo loan? Thinking it may have a lower interest rate and save me more money in the long run.

Any help would be greatly appreciated. As of now I am considering the 20 year loan and paying an extra $10,000 down. I could put down as much as $30,000
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Old 10-11-2012, 10:06 PM
 
Location: Long Island, NY
1,775 posts, read 3,375,535 times
Reputation: 1886
Tough one. I would lean toward just refinancing...what would the interest rate be for the HELOC (home equity) loan? See, if the bank offers you a 4.5% rate for a HELOC on the primary, you are better off taking the 15 or 20 year straight refi on the investment property because the rate is lower.

Also, how long do you plan to keep the investment property? If you plan to sell it in 5-10 years, then just get the 30yr fixed rate at 4.5%. If you plan to keep the property for longer, then get the 15 yr refi rate and knock out that loan...I would be hesitant about increasing the debt on your primary house...just because if something happens, at least you can unload the investment property and keep your house payment the same. If you take out a HELOC, you are adding another lien which needs to be addressed when you sell the house...
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Old 10-16-2012, 12:52 PM
 
Location: Brandon
75 posts, read 214,463 times
Reputation: 34
So on the list of banks participating in Harp I can't find one to refinance me. My current lender which is Green Tree only works with Quicken loans who gave me a high interest rate with high closing costs.

What's the point of government programs supposed to help people who are underwater on their property if no bank will refinance the mortgage?
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Old 10-19-2012, 12:55 PM
 
Location: Brandon
75 posts, read 214,463 times
Reputation: 34
So after calling a few different banks I decided to just refinance my condo through quicken loans, since they are working with my mortgage servicer. Right now I'm just deliberating on either a 20 year or a 15 year refinance. I can afford the monthly payments on both but have lost so much money already in this condo I am trying to limit my losses.

I owe $92k now.
Refinancing with a 20 year loan, I will have invested $233,406. This includes closing cost, down payment, all interest and remaining balance due.
With a 15 year loan, invested $219,452.

Condo right now is only worth $63,000 and if I can keep it rented at $925 for 5 years will probably be worth around $70-$80k hopefully and will owe $82,566. So then I can sell it at that point and just pay cash for the difference.

I wish there was a way to break even or limit my losses. Losing over $200k is a very bad investment. Any suggestions? Thanks.
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