Refinancing When Upside Down?
Sarah wants to know if it's possible to refinance when your home is upside down. Dave says no.
QUESTION: Sarah on Facebook wants to know if it’s possible to refinance when your home is upside down. Dave says no.
ANSWER: No, it’s not. The only possibility is if your existing mortgage company who’s already under-collateralized, meaning they are already in a mess, will work with you to reset the loan at a lower interest rate. Sometimes you can talk them into doing that. But there’s not a standard program out there for a premium rate. You may get a rip-off subprime rate, thus the thing that caused this mess, which you wouldn’t want to do. You’d want to stay with what you’ve got. It’s very difficult to refinance when you’re upside down. Virtually impossible, and most of the options that you might have are not good ones. You’re probably stuck. There’s nothing wrong with gathering information and finding what programs come out. Things do change from time to time.