The most common misconception with ARM loans is that the rates on them with GO UP.

Right now if your on an ARM and its set to adjust, it will most likely GO DOWN....

Check the "Margin and Index" of your loan, it will probably go down because all the interest rate indexes are so low right now....don't be fooled into thinking its going to skyrocket.

Kyle Hufford
480.628.1943
kyle@novahomeloans.com

NOVA has been named among the Top 10 Mortgage Bankers in Arizona by Arizona Business Magazine - The Best of Arizona Business 2001 and 2002. They have consistently ranked as the local industry leader for the past 8 years, closing more loans each month than any other mortgage lender in Southern Arizona.

My first question would be: Did you take out the 2nd mortgage at the same time as the first to buy the property? If yes. This is a rate and term refinance: FHA loan limits aside, you can go up to 97% of the value, which obviously isn't there. Mr. Rebello has it right. The LTV limit on Fannie Mae loans is 125%. However, this is a manaul underwrite. That means that a human will look at your file instead of a computer. More paperwork and more scrutiny. It can also only be done through a retail company (for now). Brokers, wholesale companies are restricted at 105%. Here's some other good news: Your ARM may adjust down. Interest only is not a bad thing. You can pay principal. Find out what the margin is on your loan (typically no more than 2.25%) and find out what the index is when your ARM adjusts http://(www.bankrate.com). So, it may makes sense to wait for the values to come back.

The home affordable refinance LTV limit is now 125%.

With the numbers you've provided, you might be eligible for a home affordable refinance. Your first mortgage balance is below the 105% LTV limit currently in place for a refinance if your first mortgage is either a Fannie Mae or Freddie Mac loan. Your second mortgage company would have to agree to subordinate for the refinance to work, but they have very little leverage with which to object. You also may be eligible for a loan modification of the refinance does not work. We can help you determine what your options are if want to get in touch with me.

Brian S. Cardenas
President / Mortgage Consultant
Antigua Capital Funding
Email: brianc@antiguacapital.com