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You'd be surprised how the lenders talk a good game but when you actually call for help, they give you the run around, especially if the person is current on the mortgage. Yes, you have better chances of a loan modification once you are delinquent. Sounds crazy. best bet is to do a refi with another lender, assuming this person can actually afford the home. You can try with an FHA Secure loan which is basically a traditional FHA loan but for people with ARMs. You have to meet the guidelines so your house pymt can't be like 50% of your income or more. That's why alot of people are unable to refinance. they bought too much house and even though they didn't get behind on the pymts, now they can't refi so when the ARM goes up, they are stuck. Anyway, it's back to basics.
Are they able to document their income now?
Here in Charlotte we have been having home appreciation so I'm sure they have equity in the home.
They are also able to do a 'rate modification' if the lender will do it.
This will freeze their rates as is into a 30yr fixed.
Yes they are able to document their income now.
In the area they live (suburb of Charlotte) the resale market is awful right now. Too many homes competing w/new construction. I follow it every day and would be surprised if they could get the same amount as they did two years ago.....I'm assuming the home would need to be appraised for an amount above what they bought it for assuming they don't have too much equity??
these are all good suggestions/ideas from everyone. Thanks
They will need 97.75% ltv to do an fha loan.
If they put money down when they bought the house..then they should have equity. I live in Charlotte, and my home has gone up due to the new constructions.
I had a 3 year ARM that reset while the house was on the market. I had to wait until it came off the market to refi. If I had been smart I would have refied sooner, but was hoping it would sell so I could move. 5 months after it reset I started the refi paperwork. It took 2 more months to get everything settled before I got into a locked rate.
My advice is to try and refi asap. Sometimes things can go wrong and the date of closing will be pushed back. Give yourself enough wiggle room.
Most lenders will not refinance your loan if your home has been on the market in the last 6months.
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