Refi Rental Home

[Octanefam]

Looking to refi my rental incase I decided to walk on my primary home. My non owner occupied rate is at 6.5% and I owe 175k and house is worth about 175k ish. The loan isn't a Fannie or Freddie loan so that's not an option. The current loan is with BoA what's the chance in getting a better rate out of them??

Thanks

[Erik Sandstrom]

6.5 is extremely high but you could probably get an FHA loan if you wanted to put some down depending on what the appraisal came out as. The only problem with FHA loans are that you must have mortgage insurance for 5 years, and the premium right now (which has been raised) is 1.15%. So you would have to determine if your new mortgage payments with the new insurance would be lower than what you're paying right now.

The other option would be either putting 5-20% down for a conventional loan, anything under 20% would also require mortgage insurance however not a 5 year limit. Once you can prove that you owe less than 80% or get to 78% of what the original balance of the loan you can cancel MI.

If this is all a foreign language to you, I can help you determine if it would be in your best interest. Just shoot me an email or phone call.

[Erik Sandstrom]

I just now went back and read that it's your investment property. That does change things just a little. There are different products available for investment properties but there is no financing up to 100% on investments unless it's Fannie Mae or Freddie Mac backed.

[greg.]

Old post, but, I fall into a similar situation.

I have a former primary home that now is a rental. It's at 6.125, valued at approximately 260k, I owe, 245k on it. It is Fannie Mae or Freddie, I can't remember which, but one of the two backed. It was purchased in December of 2007.

I'm able to make my payments, but after all is said and done, I have about 100 dollars to spare per month, and another property to take care of. (Long story short)

My question is, I was forced to relocate due to a PCS (Change of duty station for the military) Which resulted in a 2000$ /mo pay cut. Would I qualify under the HARP2? I also have a chunk of change in retirement funds that I would prefer not to touch. Is this going to affect my qualification for it?

Any help would be awesome.
Cheers,
Greg

[Cat Damiano]

Hi greg,


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

If you have not already done so you can contact Erik directly so that he can go over your scenario to see if you would be eligible for the HARP 2. His contact information is located right in the signature line of his post here in the thread.

[Erik Sandstrom]

Hi Greg,
I think we might have already spoken however here's something to go by.

With your income being reduced the HARP program has a max back end debt to income ratio of 65%, you must not exceed that amount. Now the higher the debt to income the lower chance you have of being approved. I myself have obtained an approval at 64% however I was amazed when I did.

Your retirement funds will significantly improve your chances of obtaining an approval. I have noticed every once in awhile the automated underwriting system for HARP seems to like it when there is a positive net worth.