ARM Loan, underwater. Need ideas

[swtch7]

Hey Guys/Gals,

To start off, thank you for any help in advance. I'm stuck between a rock and a hard place like many of you but was hoping to get some advice or new routes to follow.
Facts:
80/20 loan.
80 loan is 222,000 at 4.5% (arm) will expire in 2 1/2 years
20 loan is 24,000 at 9.5% (fixed)
Bought the home for 255,000
just appraised for 225,000

Trying to refi to get out of this ARM, was locked in at 5.75 and then the appraisal came back....

I dont qualify for the HARP (obama) loan because my investor isnt the two big ones.

So, I would like to know if I would have any chance to refi just the 80% loan. Welsfargo says no but Quickenloans.com says they can do it.. but a 750$ is needed to start the process.....

Sounds fishy to me.

Other option is to start paying more on my current loans and hold out until the reset. Then either refi or sell the home and hope the value goes up.

Thanks!

[Moe Bedard]

swtch7,


Welcome to the forum and thank you for joining........

If the 4.5% is an interest only loan.............there wouldn't be much that a modification would be able to change with that.........it could raise the payment.

If this is the case..............then it looks like the refi or keeping the low interest rate for the next 2.5 years are the options that appear to be left..........this is a personal decision that only you can make based on your financial situation........

I have not seen any negative information regarding Quicken Loans on the forum............but you may want to google them and see what you come up with.

[swtch7]

Thanks for your reply ***.

I plan on the mortgage payment going up quite a bit. However, i wanted to get out of this arm loan while the interest rates were low. I think the best plan is to keep paying on the 80/20 and hope the market turns around in 2 1/2 years and refi at that point. Hopefully we have hit the bottom of the housing market here in VA and interest rates wont sky rocket. Time will tell. thanks