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07-28-2015 02:22 PM
If you have a $100,000 mortgage and the house has been devalued by half, and you try to refinance, will the bank make you pay the difference between the original amount you were loaned and what its value is now? Ex. If the $100,000 loan gets refinanced and the appraisal is now $50,000 do they refinance for $50,000 and not the original $100,000.? No way I could pay the difference in a lump sum. Someone on these boards must have had a similar experience. I am afraid to alert the bank---they might call in the loan.
07-28-2015 02:49 PM
If I am understanding your question, you refinance the amount of the rest of your loan.
You borrowed it, you owe it.
The lending institution usually requires an appraisal, so if your property is worth LESS than the appraised value, they may not want to lend the money. Not a good deal for the lender.
I have refinanced a few times, but the property was always worth more than what we borrowed, so I have not had any experience with the situation you described.
Hyacinth
07-28-2015 02:56 PM
I have not had this happen but I think there are federal loan programs available for this situation if you qualify.
07-28-2015 02:59 PM
@itsmagic wrote:I have not had this happen but I think there are federal loan programs available for this situation if you qualify.
Is that the one called HARP?
Hyacinth
07-28-2015 03:12 PM
@hyacinth003 wrote:
@itsmagic wrote:I have not had this happen but I think there are federal loan programs available for this situation if you qualify.
Is that the one called HARP?
Hyacinth
Yes and I think there is another one but I don't have any experience with either.
07-28-2015 03:19 PM
Underwriting is not going to allow the bank to finance a 100k loan on a house valued at 50k. If you're making your present mortgage payments they can't call in the loan you already have just because your house has reduced in value.
07-28-2015 03:41 PM
I would look into one of the HARP programs if the amount owed is more than the appraisal. Otherwise, refinancing would not be an option since a traditional refi would require the loan to be only 80-90% of the appraised value, and if more were owed these conditions couldn't be met without bringing cash to the table.
07-28-2015 04:19 PM
BAILEYSUE____ The smartest thing to do is go to Your bank first (if it is a reputable bank) and see about re-fi through them, or, go to a finanacial ADVISOR, NOT a finance company, to see what the best way to go is. You will HAVE to refinance your BALANCE, not what you think it is worth. Can you paint,new carpet, landscape? Things like that can help get a higher appraisal. NOT PROFESSIONAL ADVICE HERE, JUST IDEAS FROM READING LOTS OF DIFFERENT STUFF!!!!!!! tedEbear
07-28-2015 04:22 PM - edited 07-28-2015 04:46 PM
Information about a Harp Loan. https://en.wikipedia.org/wiki/Home_Affordable_Refinance_Program
More info about HARP http://www.makinghomeaffordable.gov/programs/lower-rates/Pages/harp.aspx
07-28-2015 05:18 PM
Your lender will not allow you to refinance a loan for more than the present value of your home. You must continue to pay the loan you have or sell. Those are your options, along with foreclosure.
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