Refinancing a house thats lost value?

Chanda
i bought my house just before the real estate bubble burst. now my house has dropped in value nearly 20%. problems with variable rate interest loans were just starting to appear when i bought so i got a fixed rate. my rate is fairly high as is my monthly mortgage payment.my question is do i even have a chance of refinancing to the now lower rates if my home has dropped so much in value? i'm waiting til interest rates bottom out but will a bank even give me the time of day with home prices dropping so much? thanks for your help. cb

Domonique
The drop in the value of your home will be problematic. Your best bet will be to pay down the debt as much and as quickly as possible. If you can invest the money at a higher rate than your mortgage, invest there. If not, then pay down the mortgage by having more go to pay down principal until you owe less than what your place is worth.

Bambi
Possibly. You left out several critical details. Like your mortgage balance and current market value. Also, your credit history - what is your FICO score? What is the current rate on your loan, and is it worth the time and expense to pursue the refi?Check your source on interest rate direction carefully. Rates are rising now, and have come up quite a bit in the last few weeks. Now well over 6% again.If all else fails, your current lender may do a streamline refinance for you without an appraisal. This especially applies to a current FHA insured mortgage. If you need help with these questions, let me know.

Joya
What is the current value compared to your loan balance? That is the critical question.