Can you refinance a home if you have little or no equity?
simply661 asked:
My mother recently refinanced her home twice before and because of the housing market going wayyy low she was looking to see if it was possible to refinance her home to lower her payment and go back to a fixed 30 year loan. (we don’t want to take any money out btw just lower the payment)
My mother recently refinanced her home twice before and because of the housing market going wayyy low she was looking to see if it was possible to refinance her home to lower her payment and go back to a fixed 30 year loan. (we don’t want to take any money out btw just lower the payment)
Is that possible?
BTW she’s on an ajustable rate.
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Depends on the equity in the property and since you say she has little or no equity she will not be able to refinance.
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I haven’t seen any loans with less than 3% down + closing costs in 4 months.
If she is on an ARM, she should have a good rate now, since the prime rate is so low.
All of these refis are costing her 1-2% of the loan by the way. That goes out the window.
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Yes it is possible. If you have absolutely NO equity, then you will probably incur some out of pocket expenses for closing costs, appraisals, etc. that you could otherwise include in the loan.
Interest rate and monthly payment will depend upon her credit rating, payment history, and debt to income ratio as well as the type of loan she picks. Good luck!
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it really depends on a few factors, one, what is the appraised value of the home, two, what does she owe on the current mortgage, three, when does she adjust. If she was in a longer term arm and doesn’t adjust for a few years, then she may be well advised to stay right where she is. It could be possible as FHA could be an option and don’t be too quick to assume that her house has lost value, there are markets that are holding steady and even gaining value. One question I have is has she looking into any property tax breaks, depending on the municipality, she may be eligible for a property tax break, let me know if I can answer anything else, good luck