Saturday, February 28, 2009

Adjusting ARM, but Your Upside Down... Now What?

Many people are finding themselves in exactly this situation... the payments have been affordable, up until now, but their ARM (Adjustable Rate Mortgage) is adjusting, and maybe more than a little. This could be the difference between "a house you can afford" and one you can't. Originally when you took this loan, you figured you would be ready to sell by now, but it's a different world than you expected. You'd refinance, but you're upside down and don't have a bunch of cash to bring to the table. So now what? There is a product that might help you. It won't help everyone, but it will help some.... a lot of people, actually, if they know about it. So tell everyone you know! It's called an FHA Streamline Refi. They don't look at your income, your credit, your debt, or even the equity you have in your house... they ONLY look at your mortgage payment history. If, up until now, you've been paying your mortgage payments every month, on time, then you probably qualify. You can borrow up to the amount you originally borrowed. If you have not paid down your mortgage at all, then you may have to come "out of pocket" for closing costs. But, if you've paid down a bit of your loan since you originally got it, it may not be that much. So, it's worth checking into. I recently met with sa couple who owned 2 homes, and they could not afford them. They were considering doing short sales on both to get out from under the debt, but they really do need "somewhere" to live and they really do love their home and want to stay there. Being upside down is not what bothered them, it's the fact that they would soon have no savings left and would not be able to continue to make the monthly payments. After having them talk to a lender that I work with, we were able to determine that if they brought about $3,000 to the settlement table to cover closing costs, they'd be able to refi using this product and drop their rate from 7.35% to about 5%, saving them $500-600 a month... yes, A MONTH. It does not take a rocket scientist to realize that this would make a significant lifestyle difference for them. True, they may still short sell the second home, but that is yet to be decided. They think they can continue to pay both payments with the new payment amount....and that is a big win for everyone. Interested in learning more? Visit my web site, and talk to one of the Preferred Lenders listed there.
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