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Refinancing a Underwater Investment Property

Hello,I own a Investment Property which used to be my primary residence. I purchased it back in 2006 for 225K with 100% financing. Things got little tight for me so I refinanced the property in 2011, I moved out and started renting out the property .The rent i am receiving is only covering 75% of my monthly Mortgage payment.I currently owe 212K on the house...the house is a 3 bedroom, 2.5 Bath Cape Cod sitting on 5 Acre lot, electric, well and septic. The house is located in rural area King William County, VA. I understand that the house is still underwater by somewhere 10-20K. My question is,1) If i pay 20k to the bank will i be able to refinance 100% investment property?2) Also what options do i have of lowering my monthly payment so the rent received at least covers 95% - 100% of the monthly payment.Thank you,Underwater by h_chan_747_951 from Sunnyvale, California. Feb 12th 2013 Reply


Steven Ceceri (CreativeFinancingOptionsGroup)
#36 ranked lender in Massachusetts - 723 contributions

Good Morning. If the loan is FHA Insured, you have options up to 97.75% LTV for the refinance. If this a Fannie or Freddie loan, you can get up to 75% typically, possibly 80% LTV may be an option. You need to determine the Cost to Benefit on this property and decide if you have the cash to bring the loan amount down, if it is worth it to obtain the new rate. I'd be happy to look at this scenario in more detail with you directly if you'd like. Just message me offline if you want direct help! Thank you!

Feb 12th 2013
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Carlo Sanchez (MortgageLendingPro)
#0 ranked lender in Utah - 1,163 contributions

If it's and FHA you can Streamline it, if not check with the lender. Some Credit Unions have their own programs will allow up to 100% LTV.

Feb 12th 2013
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Equitus Mortgage (EquitusMortgage)
#65 ranked lender in Washington - 39 contributions

If this a Fannie or Freddie loan, the guidelines allow for a maximum of 85% LTV.

Feb 12th 2013
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Charlie Sparks (CharlieSparks)
#9 ranked lender in New Mexico - 400 contributions

I don't lend in VA but can at least offer some advice. If your current loan is FHA it is possible to do a 'streamline' refinance without an appraisal. If it is conventional, (either Fannie Mae or Freddie Mac), the loan is too recent to qualify for the existing HARP program. Currently a mortgage would need to have been securitized prior to 6/1/09. Congress is toying with a new version of HARP, dubbed HARP3, which may allow you to refinance without an appraisal if it also extends this securitization date. If and when that happens you should understand that many lenders put their own restrictions on these loans. In my market most of my competition won't lend over 105% of the Fannie/Freddie estimated value on an investment property. My company doesn't have any limit. Best of luck to you!

Feb 12th 2013
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Ken Burrows (mortgagesforamerica)
#19 ranked lender in Nevada - 572 contributions

If your loan is owned by Fannie Mae, Freddie Mac, FHA, VA or USDA we should be able to either do a HARP 2,0 refinance or a Streamline refinance. I can go over all of your options with you over the telephone. P: 888-320-7888 - www.MortgagesforAmerica.org - Ken Burrows

Feb 12th 2013
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Linda Wintersteen (Linda123)
#63 ranked lender in Arizona - 1,256 contributions

I DO have a possible solution for you.. who is your bank/ servicier?? linda yourloanpartnerforlife@live.com

Feb 12th 2013
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Larry Gray (lgray_312_247)
#594 ranked lender in California - 1,139 contributions

If none of the excellent options mentioned already help you, you can consider contacting your lender for a modification. A modification without any late payments previously, can be far less detrimental to your credit and you can perhaps get intoa payment that is affordable. They will want to review all your income documentation, etc. as if you were applying for a loan.In spite of all the nightmares you may have heard on people seeking a modification, it is not as difficult as it once was.You will need to record on paper or the phone (inf allowable) every exchange with a bank rep. you have. Anything you send injust keep meticulous records of. One key will be that your overall debt to income ratio is currently too high. I have one clientwho successfully got a modification of their primary home with no late payments ever and no derogatory credit. Their second home...we managed to refinance previously. It took them about 6 to 7 months to get the modification accomplished.

Feb 12th 2013
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Anthony PapaGiorgio (apapagiorgio@inlandbank.com)
#80 ranked lender in Illinois - 16 contributions

Well, with the date you refinanced at last you wouldn't be eligible for harp. Paying it down to 100% ltv wouldn't help in this case. But depending on your current mortgage type there may be some other options to consider, what type of mortgage are you currently in?

Feb 12th 2013
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