Refi

[Meg K.]

Hello,

Can someone please explain refinancing in layman's terms. I am an owner-occupant in a duplex. I overpaid for the property 10 years ago through a closed bid. Anyway, recently i got a letter from my new mortgage co.--KeyBank stating that my escrow is short. This has increased my mortgage by $60! Rental income is $725...my mortgage payment is $982.00 My loan is at 6.125% for 30 years. I did try to refinance last year but a friend said it was not worth paying the closing fees of $3,000. My house was underwater for a long time...still is? Not sure...the property values in my area are lower than what i owe...my house is in great condition (except for needing a new roof)...

I am considering buying more multifamily property with a partner since i cant seem to afford the 25% downpayment on my own. I also have a lot to learn...thankful for this site.

Meg

[Joe Delia]

Originally posted by Matt Morgan:

Hey Meg, if your home is underwater, you're not going to be able to refinance. Typically lenders will only finance 70-80% of the loan to value ratio. At a little over 6% interest, you aren't getting completely hosed, and it looks as though your renter is taking quite a bit of financial burden from the mortgage. I would closely monitor prices in your area, and as Joe said, look for a no-cost refi once you feel you have some equity. Good luck!

That's incorrect. If she qualifies for HARP she can refinance even if she's 120% under water.