Have no fear! Now is a great time to buy and it won't stay that way for long. I love working with first-time homebuyers and would be happy to send you some references of other first timers that I have helped. So stop building wealth for someone else and put your money to work for you! Give me a call and we can set up a consultation. Look forward to hearing from you!
Good Luck Sofia
Your down payment cash was converted to home equity, and it is lost.
Homeowners with equity are the first bearers of risk in a declining market. As long as your mortgage is "performing" (ie payments are on time) the lender doesn't care about the value loss... unless you are unfortunate to have accepted a negative amortization loan, commonly known as "Option ARMs". These come with clauses that trigger full amortization repayment if the loan balance hits a certain percentage over your home's value - ususally between 115% and 125% of the current value.
A refinance is based upon the appraised value of your home today based upon recent nearby sales for a similar home. It is quite likely that you have too little equity to squeeze in a cash out refinance to convert some of your remaining equity back to cash. Furthermore, your mortgage would increase in size with a corresponding increase in payment - a poor decision to make if the property tax increase has made your present payment unaffordable.
Linda and Sean offer excellent suggestions which will may help keep your mortgage affordable - and incidentally cost very little compare to a refinance.
There is a government program extended until the rest of this year, and to get a home modification,
and you will be able to stay in your home.
If you wait until the property values go up again, they you can sell for a profit.
This program has worked for a friend of mine, and I am sure they will be able to help you also.
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I have sat down with owners who have put out all they had into 1 home.
The bright side is someone will enter into a home that is fixed up.
Bad side is owner is out of that money, and will probably end up with credit damage.
If you think your lender did something fraudulant.
Hire an attorney to do a forensic loan audit(review your original NOTE line for line)
If the attorney can find something to go after your lender you may have something. (long process but)
Ive heard an investor got a free house. The lender did not want to go to court.
My Partner and I have successfully closed out 7 short sales in the last couple of months in San Jose,
Malpitas, Fairfield and Suisun CA
Currently Today is July 29 2009
We have 3 properties in Escrow and are expecting to close in less than 20 days.
Currently we are looking for short sales to purchase in the bay area 500k and up.
We have been buying them, fixing them up and re-selling them-
(EVEN TO VA BUYERS) We will repair the home
so the home will get Funded by the end buyers Lender.
AS SEEN ON TV.
If the home is not repaired the home will sit their until you have a conventional buyer or a ALL Cash Buyer. Purchase the property
We have a proven track record in Cali.
Call me or visit
Negotiating the Bay Area.
You might need a short sale it sounds like. You can go rent for a while and get back into homeownership down the road in a home with a mortgage you can afford. You might need to look at credit repair after your short sale or foreclosue. Good luck!
I represent one of the firms who will do a forensic analysis of your loan-for a charge. I suggest that before you contact me you see the FAIR HOUSING COUNCIL OF RIVERSIDE CO. 3933 Mission Ave [at Market St-across from the Greyhound Bus Depot] Their phone # is 951-682-6581. You can see them online at http://www.fairhousing.net They are FHA approved and there is no charge
I'm old and not a licensed agent but I started buying in 1973 after the first foreclosure seminar in the area [By Charles Shubin] and I have been insturmental in buying 220 properties at severe discounts. I've been an appraisor, a sales trustee for foreclosures etc [just not smart enough to be a Broker] so I find it easy to evaluate new trends. Newest: 95% of all loans 2002-2006 are void! Grampa Jack
Your mortgage company will not return any downpayment that was made during the purchase of the home. The only way to access equity is to cash out refinance or secure a line of credit on the property -- but both transactions would be based on the current value of the home (not the value when you purchased).
If you still can't afford your payment, consider renting your house out. You may not get enough in rent to cover your payment, but any shortfall is easier to abosrb than losing your house ... and your $100K.
I've posted several answers already on Trulia:
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First Team Real Estate