What should I know about refinancing my home when I owe more than it's worth?

Answer by  flamiss22 (5081)

Most likely you won't be able to refinance. When banks lend money there has to be the possiblity to make a profit and if your are upside down on your loan they won't have that chance. You are better off renting it out.

Answer by  Brandon55 (1719)

Refinancing your home can be done through any bank that will loan you the money. If you haven't already started applying for loans then you will likely get turned down since most banks won't loan more than a property is worth. If you do find a lendor then it is no different than any other mortgage.

Answer by  quietgg (292)

First you need to know that it will be very difficult and you may not get your preferred back to do it. Also, your interest rate will be high and you will pay points, which will increase the difference between the loan and teh value even more. A solutionj to this is to pay a lump sum into the principal.

Answer by  nekturk (139)

It may not be possible to refinance a loan if you owe more than the house is worth, but there are some government-sponsored "Refinance Plus" loan modification programs that may allow you to refinance in this situation.

Answer by  Devin98 (487)

If you owe more than your home is worth you most likely will not be able to refinance since you have no equity in your home.