Financing in 95833>Question Details

Abhishek, Other/Just Looking in Sacramento, CA

I bought a house for $420K last March with 100% financing @ 6.375 on the first and 7.0%(currently) on the

Asked by Abhishek, Sacramento, CA Fri Feb 8, 2008

second. The value of my house has gone down by as much as 15K. Are there any lenders who may give me a better rate with 100% financing? I have excellent credit score. Thanks for your help

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Jeff Marr wrote: "Looks like you haven't got a response from a loan officer yet, so here it is."

Jeff, did you read the first five responses?

Trulia does not have separate small profile categories ( on the question page) for agents and loan officers. We all "Real Estate Pros' by Trulia classification; one would have to click on the full profile page to see if a "pro" was an agent, an LO, an investor, a hybrid, or something else.

Click the profiles of the first five posters to view their full profiles. It will help you decide how to create your own profile.

Otherwise a good first post, I look forward to seeing more.
1 vote Thank Flag Link Sat Mar 1, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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A 100% Rate and Term refinance would mean that you would have to bring in at least the $15,000 that you say your house has lost value. - You must be in a nearly bullet proof neighborhood.. The average decline last year in Sacramento was 20%. If your house was average it declined by $75,000 to $80,000.
You would also have to bring in all the cash for the loan fees, credit report, appraisal, title and escrow. At least another $3,000. - But to get the lowest interest rate your upfront loan fees would be even higher.

If by 100% you mean you want a lender to refinance the entirety of both balances, and roll the cost of refinancing in to the loan, I would have to agree with Rick and Elizabeth.

That would be 105% financing, at least. A "bait and switch" lender might offer to do it, but I don't think it is possible to do for real. .
1 vote Thank Flag Link Fri Feb 8, 2008
Jim Walker, Real Estate Pro in Carmichael, CA
MVP'08
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Looks like you haven't got a response from a loan officer yet, so here it is....First off, 100% isn't currently available due to 'adverse market conditions', 95% is the highest lenders will allow in nearly all cases, that's assuming you're going full doc. Drop this by another 10% if you're going stated income. Additionally, if you bought a year ago, expect at least a 10-15% drop in value. Contacting a licensed appraiser will provide your answer. There is one refi possibility for you, called the FHA 95% Cash Out Refi, which does allow for your combined loan-to-value (CLTV) to exceed 100%, but it only works when you have a 1st and 2nd loan. If that's you then I'd check it out, rates are outstanding now! Outside of this you're not going anywhere unless you're undergoing financial hardships, then something like a short sale might apply.

Jeff Marr
0 votes Thank Flag Link Sat Mar 1, 2008
If you can’t refi the home and you are stuck between a rock and letting the home go to the bank, do not forget the possibility of a short sale to mitigate and long term credit consequences. And of course I specialize in them!
0 votes Thank Flag Link Thu Feb 28, 2008
Jim is correct. I don't have anyone who will do 100% refi. My best suggestion would be stay in your current loan, which is not too bad for 100% financing. The only other option would be to wait until we finally start seeing the increase in FHA loan limits. Then you may need to come in with some cash, but you could get it down to a 30 yr fixed at a good rate.
0 votes Thank Flag Link Sun Feb 17, 2008
Ditto to the first answer. Stay with what you have! I don't think you can do any better, especially with 100% financing in a declining market.
Web Reference: http://www.RickFeerick.com
0 votes Thank Flag Link Fri Feb 8, 2008
There are problems associated with refinancing a home that has fallen in value. For starters, you most likely do not have enough equity, and lenders are shying away from making 100% loans, in addition to the fact -- should you run into problems making the mortgage payments later, you would have converted a purchase money loan into a hard-money loan, which could carry a deficiency judgment in the event of default. To refinance, you will also pay costs associated with the loan.

Personally, I think your rates are pretty good for the type of financing you received. :)
0 votes Thank Flag Link Fri Feb 8, 2008
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