I need to settle 2nd with B of A but how?

chazkeepahoma

LoanSafe Member
Jan 16, 2009
44
0
6
California
It's been about 5 year since I've post on here and should have stopped paying back then when I was underwater. But that is another long story. This is where I'm at.

1st Loan, Seterus , Making Home Affor. Plan, $188,000 balance 20yrs. left.
2nd Loan, BOA, Making Home Affor, Plan, $42,000 balance 32yrs. left. I'll be dead before this is paid off.
BK7 almost 10yrs. ago both loans, not reaffirmed.
House is worth about $300,000. We want to keep the house long term.

Why BOA didn't forgive my 2nd back in the day when they forgave many others, I don't know.
As you can see I have equity but this 2nd loan is hanging around my neck. I think the principle has gone down about $2,000 in 8 yrs. Yes folks this was a 40yr. loan. Crazy! I'll be well into my 90's before this is paid off!
I would like to refinance the 1st loan some day or do a reverse mortgage sometime down the road but this ridiculous 2nd loan is killing me.

What should or can I do!!!
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,022
158
63
San Diego, California
www.loansreduced.com
Hi there,
It's time to look at refinancing both liens together.

Home Value: 300,000.00
1st Lien: 188,000
2nd Lien: 42,000
Total: 230,000.00 (76% Loan to Value)

This would be considered a cash out refinance, your bankruptcy is already seasoned so depending on your credit score there are certain programs that will benefit over others. Reverse mortgage won't help you at this time most likely because you don't have enough equity. Reverse mortgages are based on age & there area you live which will determine what you can get.

If by any chance you obtained your 2nd mortgage at the same time as the first when you purchased the home, it may not be considered a cash out refinance.

I would love to look into scenario's to see what we can do to help, we do not care that the home was included in bankruptcy.

Please reach out to me at: [email protected] or 619-379-8999. We can go over a few scenarios and see what may be best.
 

OneHugeMess

LoanSafe Member
May 30, 2016
412
31
28
Honestly - if the 2nd was modified, and you were given a low-interest rate, it would make more sense to just consider sending in a higher payment, than refinancing to a higher interest rate. I could be wrong -- but a lot of people like you received 1-3% rates on 2nd liens. If you did...

Get an Amortization Calculator out, type in your rate, and when you want to pay it off - and just make that your new payment. The extra money sent in every month will apply to principle, and you'll pay down your loan.
https://www.calculatorsoup.com/calculators/financial/mortgage-calculator.php
 

Erik Sandstrom

Mortgage Expert - Call 1-619-379-8999
Staff member
Loan Safe Mortgage
Jan 14, 2011
2,022
158
63
San Diego, California
www.loansreduced.com
Definitely going to be a business decision on this one. If the rate is low on the 1st and 2nd, there usually is no benefit to refinancing because you can always pay more towards the mortgage and pay the principal off quicker than if you were to have a higher interest.

I have a really neat system that can show you your current loan vs a new one. Here is an example of what it looks like but of course this can be tailored to fit your situation. https://edge.mortgagecoach.com/report/edgereport.html#1284325-0-2-1211907