For an 80/20 loan with your score that rate is not bad.

What's bad is you say you can hardly make the payment.

Usually the 80 percent is interest only and the 20 percent is principal and interest so you can have the lowest price possible.

In hindsight you probabaly should have bought outside the area to get more affordable housing.

If you switch to a conventional loan you will get hit with mortgage insurance which you are not paying now with the 80/20,you will have to have 20 percent down to not pay the mortgage insurance.

The first five years of a loan you are paying out alot of interest whether conventional or interest only,so i usually advise get an 80/20 for the lowest possible payment and get it fixed for 3 to 5 years,at that time when your credit is better you can refi or sell your home.

The bottom is coming in cali and when people can no longer refi to get cash to make payments on houses they can't afford you will see massive foreclosures,people walking away from there houses,and values deflating in the area due to people purchasing foreclosures over newer home developments that are priced higher.

I would like to say i am not a mortgage person but i am an re agent and investor and this is just my opinion on things.

imho i think you should have bought something more affordable in a different area.Yes fha loan is lower at 5.75 percent overall but when you get hit witht he mortgage insurance it comes out to be about the same or more if you don't have 20 percent down.

good luck

Yeah that was why I encouraged him to read the note. Deffinately must have been a misunderstanding of what I found.

sc2dave,

I'm not sure if you went Stated or Full Doc but normally with that score... you should've been able to avoid the PPP.

Also, if you are considering refinancing for a better rate/term... I know many lenders that will do it without seasoning. If you're looking to refinance for cashout... then you're basically looking at the typical 6 months seasoning.

Either case, if you're going to pay for PPP... it's best to weigh it out. Ask yourself "How long are you planning to stay in the house?" If you can break even before that length of time and possibly walk out with benefits then 'maybe' a refi makes sense.

hmmmm...litton huh? greg should know about them. better yet, go to ripoff report and do some research.....DO NOT CALL LITTON!!!!! i think i read you went stated...first problem.

some of you might know me from another forum(RIBBIT)..BOTTOM LINE IS A STATED LOAN IS A LIAR LOAN.PERIOD. been sayin it for years. if your loan defaults or dosent perform, you can but your broker is in for a call from there FRAUD dept. they might start looking to verify income. AGAIN A STATED LOAN DOSENT MEAN YOU LIE ON THE APPLICATION.....look at your original application, look at page 2...what income was stated??? was it close to what you make??? im thinkin not even close since you some VERY uncomfortable already. keep in mind, if you lie on an application...you have commited wire fraud, a broker from our competition was just taken away in cuffs(not the fuzzy kind for this same reason. now it was probably more dramtic then what you have here...but all in all. i suggest you call your mortgage broker, have a sit down..and see WHAT THEY WILL DO.

im just sayin

---------------------------------
James Keely
Director Of Operations
Florida Mutual Mortgage
http://www.zerodownflorida.com

a couple of more options.....wait a couple of more months, if you can go full doc...and do this loan throught FANNIE with LPMI(lender paid mortgage insurance) yes the rate will be higher than if you went with traditional MI...but, should still be alot lower.

i have done these with Washenaw and Irwin. Irwins conforming unit is up for sale, soooooo i would tend to look at Washenaw.

---------------------------------
James Keely
Director Of Operations
Florida Mutual Mortgage
http://www.zerodownflorida.com

I like that post about fuzzy handcuffs.

Yes Litton has a very bad servicing reputation. I frequently see loans sold to them in which people are treated unfairly.

Washtenaw? I heard something about them I have yet to confirm. A big lawsuit about inflating appraisals I beleive. I do not use them so I never looked it up.

Basically you have options. I would check the 1003 in your loan documents. Look at section V and see what the income was like James said.

i haven't been able to find someone to refi,because of the ppp,and because i bought the house at appraised value. is there someone out there that will?

sc2dave, It is possible to only redo the second as a Home equity line of credit(HELOC), and eat that pre-pay with that refi. If the equity in you home can cover it? A local bank such as Bank of America or where I am at in TN I use someone like 5th3rd bank to do Helocs for my cutomers. However your score will need some improvment, but if you take the current second which is I think
$155K @10.5% on 30 year term = 1417.85 pmt
VS
$155K @ 7.25% interst only= 936.45 pmt

I am not saying that going to the Interest Only is the best possible option, but it may allow you some breathing room while you wait for the 1st mortgage pre-pay to expire

if he did a HELOC, his credit score would get a whole lot worse a whole lot faster.

sc2dave, you should keep this in mind before taking TN's advice. are you willing to take the FICO hit?

I am not sure what else besides selling the property will bring him some monthly payment relief quickly.

personally i think he should cut his losses and sell. it's unfortunate that someone put him into the home in the first place, but at least it's not a whole lot worse.

there might be some solutions out there, but lowering his credit score would definately not help.

the problem with selling is that he has hard pre-payment penaltys on both mortgages. So the poor guy is going to have to pay around $20,000 to sell plus realtor fees and those types of items. He may be upside down and end up owing just to sell. On the bright side he is In SoCal and property values seem to go up about $100,000 a day. So hopefully he will have some form of equity. That being said SC2Dave you need to get some renters in there ASAP and maybe that will cure the problem.

as far as property appreciation goes in CA, if this were 2003, 2004, or even early 2005, then dave would be in a completely different situation.

i actually heard today that one of my client's clients bought a house in November and now he got it appraised again and the value has dropped $15,000 since then. times are changing. appreciation is slowing way down and homes aren't flying off the market anymore. the MLS is full of homes, and there aren't many takers.

as far as rentals go, the rent price in Southern CA has stayed the same over the last 4-5 years while in some places property value has doubled. you can hardly even come out good as far as an immediate cash flow situation by renting an SFR.

let's say he rented it. i would be willing to bet the ranch that there would still be some mortgage payment left over afterwards. so now he pays the remaining mortgage balance AND he pays rent somewhere so his family can live.

i only see him coming out in the negative.

people make mistakes. sometimes we lose money. i myself have lost a lot of money making mistakes and i've learned from those mistakes. there isn't always a clean "get out with no losses" answer in real estate, even though loan officers and real estate agents like to think so.

sometimes you take a loss. the key is not to repeat it. learn the lesson and move on.