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Why can't I refinance?!?!?!

August 6th, 2009 at 05:31 pm

I've been down this road before. I want to refinance and I can't. It's so frustrating to see all the money I'm losing every month by not being able to. Here's the quick recap...

-Bought home in Feb 2006 for 166k. They had to break it into two loans 8% and 11% to avoid PMI? I was still in college and my husband had next to no credit either. We took what we could get.

-By December 2007 our home value went to 225k and we refinanced our two loans into one home equity loan at 7.24% fixed for 25 years. Looking back we should've refinanced into a mortgage at that point, but we were stupid and didn't realize you could roll the closing costs of the mortgage into the loan and would've had a better interest rate.

-So now, 2.5 years later I'm desperate to refinance to a 15 year loan but our equity has dropped to 0. Just had an appraisal done last week and the value came in at 160k. So disheartened. All the work we did (building deck, knocking down walls, reconfiguring kitchen, painting, etc.) and the home is now worth 2 thousand less than what we owe. The mortgage consultant at PNC is trying every avenue, but so far no luck. Right now we need to bring 15k to closing and that's not going to happen. I've tried refinancing at every other bank in the last 6 months and nothing has panned out. We're not behind on payments. We bought a house we can easily afford. Why am I penalized for trying to be responsible??




7 Responses to “Why can't I refinance?!?!?!”

  1. dmontngrey Says:
    1249577407

    I understand your frustration. We're owe about 6K more than our place is worth. DH wants to move and we are very stuck right now. Just can't get out from under it despite our responsibility.

  2. monkeymama Says:
    1249578396

    Is the 7.24% fixed? Probably not, but wasn't sure. If it's fixed, in the grand scheme of things you have a good rate. I wouldn't beat myself over it.
    When rates rise, which they eventually will, you will be pleased.

    & if it isn't fixed, well, rates are low enough now. Buys you time to turn around the situation. The market will eventually improve. To only be upside down $2k is not half bad (I live in an area where MANY are upside down six figures).

    I've said a million times around these forums. There is nothing to be jealous of about people losing their homes, etc. Be PROUD you bought a home you could easily afford, and be happy that you can afford to keep it. The rest will work out in the end; don't sweat the short term.

  3. ceejay74 Says:
    1249620284

    Yup, I'm in the same fix, but much worse. Bought at $207K in 2003; now worth $160K. Got a 5-year ARM that started at 5%; were assured by people much more informed (we thought) that we'd be able to refi no problem in 2008. Unfortunately we still owe $177K so there's no question of refinancing. So far our rate has adjusted once, to 5.75%. We'll see what happens this fall; my guess is rates will rise to the point where ours adjusts upward again. Frown We'll be able to fit it into our budget, but I hate having been a sucker.

  4. whitestripe Says:
    1249626878

    people should stop looking at what their home is worth NOW, if they aren't planning on selling NOW.
    are you planning on selling now?
    if you are not, why don't you sit back and enjoy the hard work you've put into your home, and watch as your home slowly climbs in value again, as it inevitably will.
    if you are planning on selling, well the obvious thing to do is hold off as long as you can until value climbs again. it can't go down forever. it boggles my mind why people think it's a big deal if their house value is less currently. everyone is in pretty much the same boat right now, it's just the way it is.

  5. guppy Says:
    1249680251

    The only reason I care about the value of my home right now is because I'm trying to refinance. The value means the difference between me getting this new loan or not. Spending 15k to refinance isn't feasible, especially when our savings is low due to putting most of our money towards debt.

  6. ceejay74 Says:
    1249942548

    Same with me! I don't care that my home lost value except now I'm stuck with variable interest (my fault, I admit) and can't refi.

  7. Jerry Says:
    1252091573

    That is frustrating, but at least you were able to avoid PMI insurance and you are not in a terrible fix. You SHOULD be able to re-fi, but the market is in a pickle. Hopefully it will correct soon and lead to a change for you. I wish you the best!
    Jerry

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