Help with refinancing mortgage

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meandmsjones
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Help with refinancing mortgage

Postby meandmsjones » Wed Jun 30, 2010 3:08 pm

Hello all. Quick question. I attempted last year to refinance my owner occupied duplex. The point of refinancing was first and foremost to get rid of PMI. My home has appreciated in value (even with the current market), and I wanted to use my new appraisal to take advantage of the increased equity, get rid of PMI, get rid of automatic escrow (and do it myself), and lastly take advantage of interest rate savings.

After paying the appraiser, I was informed the bank would not close on my loan as we were in the middle of a siding project. By the time we could have finished the siding project and taken advantage the 90 day appraisal expiration date, the feds changed the law so that interest rates on duplexes were at a higher percentage. Sigh. So I was out the appraisal fee.

There has to be a workaround for this. I bought a fixer upper, so we are still working on projects. Right now I have a bathroom gutted.

I did try contacting my current mortgage holder, CITI, who bought my loan from my original lender, and they flat out refuse to honor the current appraisal.

Any tips, advice, anything? Aside from paying down about $9,000 to bring my LTV down, which I don't have sitting around, I feel stuck, and this doesn't seem right!
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DoingHomework
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Re: Help with refinancing mortgage

Postby DoingHomework » Mon Jul 12, 2010 12:30 pm

All I can say it to do your research first. You should not have ordered the appraisal when you were in the middle of a project. Finish what you are doing then look into getting rid of the PMI. You don't necessarily have to refinance to do this.

In general banks have gotten very strict with appraisals and also with income properties. Each of these is being used partially as a scapegoat for banks after the mortgage disaster over the last few years. They are not likely to budge on either.

To get rid of the PMI you will need to request it from the lender and they will tell you what you need to do. This will usually entail getting an appraisal if you are relying on market appreciation. But don't order the appraisal until they tell you to...better yet, have the bank order it. And don't start the process unless your property is in a condition that could be sold tomorrow! And don't start any new projects while in the process especially if you are not yourself a licensed contractor or using one.

If you would need the income from the property then you probably will not be able to refinance. That is seen as a huge risk right now. If you have W-2 income only then you would be in better shape.


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