How to Refinance an Underwater Home

Must Read

Best College Loans For Students

There are a number of different lenders when it comes to college loans. In fact any bank in the...

Engineering and computer science graduate employment boom

Students' work on the level of technology seem to employment prospects are bright. Bureau of Labor Statistics expects rapid...

Mobile Utility Applications

Several mobile utility applications are available for AIR developers. Launchpad As its name indicates, this Adobe Labs beta tool gives Flex...

Select Data

Before you can perform different operations on data, such as deleting it, changing its font or alignment, applying a...

Personal Debt Loan Consolidation

I do no believe we ever really have enough money at least I know that I don't because if...

Check Your Financial Crisis With Secured Debt Consolidation Loan UK

If you find your debts going out of your control then you should take immediate steps to check the...
Admin
test

To refinance an underwater home, most people are looking to get out of a negative equity situation and get into a positive equity situation.Although, there is no technically no refinance possible, it is possible to get a new loan with a loan amount less than the current value of the home. This in itself creates the effect similar to be able to refinancing an underwater home. For example, if John owes $600,000 for a home worth $400,000, then he will get a new loan for $360,000. The new loan is 90% of the current value of the home.QualificationsThe home-owner needs to be upside down by at least 25%. For example, if the home loan is worth $100,000, the home should be valued at $75,000 or less. There has to be a source of income to be able to pay the new mortgage. If there is no income source or the income is too low, there are certain work-arounds available as well. Other qualifications exist but each one of them has a workaround for it for most home-owners.Final ResultThe home-owner ends up with a new loan of 90% of the current home value thereby lowering their monthly payments and interest over the life of the loan significantly. The new loan is for a 30 year period and the interest rate is fixed for 30 years. The underwater refinance problem is definitely taken care of. For John’s example above, if his payments on a $600,000 loan at 6% are approximately $3600. With the new loan of $360,000 with his estimated value of the property to be $400,000, the new monthly payments would be approximately $2160. Every month, John saves about $1440. Over the course of a year, John will save $17,280.

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Latest News

Digital Marketing for Beginners

Digital marketing for starter, Let to basic learning about connecting with your audience in the right place...

What are 7 things poor people do that the rich don’t?

1. poor people watch TV in which people read books how many hours you spend in front of the TV and when...

Top 18 best small business ideas for beginners starting

A small business can be frightening and requires plenty of careful planning there are many small business ideas which can be beneficial...

Summer that makes you happy

We saw were already here I've been thinking about some of the things. I used to do with my husband even though...

4 Point to helpful tips specifically for caregivers

What you need to take a vacation. I know it sounds impossible creative and try to make it work for you almost...

More Articles Like This