What are my refinancing options?

Alyson
Here's the story: I've got an 80/20 loan. 80% of the loan is a fixed 5.25% rate. 20% of the loan is an adjustable ARM which started at 6.25% and is now at 9.25%. The loan is set to recalculate in May. With what I can gather, the 20% loan is considered a second mortgage and apparently second mortgages are harder to refinance. The house is worth approximately $20, 000 less than what I bought it for, so rolling to two loans together is out of the question. I have great credit, but a little too much revolving debt. What are my options?

Esmeralda
Sorry, but you don't really have any options as you owe more than the home is currently worth.The 5.25% you are paying on the primary mortgage is a great rate, don't screw that up! And 9.25% is not that high, some people (myself included) are paying upwards of 15% now (mine is at 12%).I would say just try and make more than the minimum on your 2nd mortgage to get it paid off as quickly as possible. If the economy continues to tank the Feds will lower the prime rate and your interest rate should come down.I am thinking about taking a second job just to send the money to my creditors. Short term pain equals long term happiness and all that.Good luck

Barton
you are welcome, thanks for the best answer Report Abuse

Bambi
The 5.25% you are paying on the primary mortgage is a great rate, is a dream.I found interesting information about your answer & the best options here. (mortgage-opportunitty-financing-and-ref… http://all-mortgage-calculators.blogspot…Good luck!

Jay
firsto f all you have till may i would begin to pay off debt to atleast 50% and also you can make extra payments or make small inprovements to the home to increese the value.i would first get the revolving debt down as much as possibleconsider payog more per month towards the second send extra payments of 100.00 and write on the check pay toward principle.

Elena
I agree with Jive's answer. Leave it alone for now and pay off some of your other debts. (I used to work for a mortgage company.) Your 80% mortgage is at an excellent rate and your 20% mortgage isn't at a bad rate. Yes, it could climb more, but it's better than having 100% of your mortgage as an ARM.

Hilario
you shouldnt touch your mortgages. you have an excellent blended rate, leave it be. focus on paying your credit card debt off now!!! repeat that mantra...pay off credit card debt now!!!btw, i own a mortgage company.