NOTE: This is not about any "government program", just a straight finance with a bank.

Like many people, the wife and I owe more on the house than it's worth. A ratio of about $130,000/$100,000. Our present mortgage is at 5.85%.

My basic question is, are we wasting our time talking to some banks, filling out applications, etc.? If it matters I've got a credit rating of 8.17 and my wife 7.89, and we are both members of USAA who I think offers home financing.

Thanks,

John Gross

I would guess 80% on current market value would fly.

If I'm understanding you the house is worth 100K and you owe 130. With today's lending environment your only going to be able to finance about 80-85K, for the balance they are going to want a down payment. Basically, you're going to have to come up with 45-50K in order to refinance.

Yeah, it stinks. However, in time the value on your home will return to it's previous valuation. Depending on where you are located that could take between 5 and 15 years.

I'm in a somewhat similar position and my plan is to hang tough. I'm also paying extra on the principle each month with the intention of having the loan cleared in another 8-10 years.

+1 on what scooter said.

$130k/$100k!! There are a lot of folk in this city who wish their "underwater" ratio was that low. I would call that "mildly moist" compared to my buddy whose ratio is about $400k/$180k.

I came off a job that had been paying my rent in 2007. I took one look at the home market here and renewed my lease.

If Fannie Mae or Freddie Mac owns your loan, you might qualify for the HARP program.

HARP is not going to lower the rate, it is just going to lower the monthly payments-it won't change the amount owed only stretch it out over a longer period of tims and ultimately cost you more. Kinda like owing 20,000 on your credit card and the bank agreeing to cut the monthly minimum payment in half to keep you from defaulting. Sure it works-but you'll never pay it back. I have done a good bit of HARP reworks for clients and quite frankly it makes me sick. All it does is lower the payment allowing one to remain in the house, but at what ultimate cost???? I know of one person ( I didn't do this one but the lawyer who put it together was telling me with an incredulous expression) who git a rework with a 45 year amortixation AND A BALLOON. Best part is that this person was 68 years old. All a HARP rework does is keep someone in their house and passes the problem on to the next in line, ie the bank/government/us!!
The longer this goes, the happier I am that I live in my little po-dunk house .

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Forum consigliere

Talk to a loan/mortgage broker. Do you have a good relationship with your bank?

We are in a similar situation. My wife works in real estate (escrow officer) and I work for the gov. (formerly spent 25 years in title insurance)

Basically, we were told we make too much money to get any of the special programs and can't refinance.

ps: We are far from being in the 1%=just two hard working, middle aged (50-60yrs) individuals.

I've been with USAA for over 40 years. They are a great insurance company. They are well-managed and above board. I just got a credit card through them and have been happy. I don't do any other banking with them, but if I were in your shoes, I'd check with them.