Do you have a rental property that you cannot refinance?
During the last real estate boom, many people jumped into investing in real estate to have a valuable asset. Unfortunately for many of these investors they used adjustable rate mortgages and other crazy loans as Negative Amortization Option ARMs.
Once housing markets and the economy took a quick turn, many of these investors found they could no longer refinance their rental properties with adjustable-rate mortgages, leaving them with increasing payments and a property that is now losing money instead of earn it.
Why couldn’t an investor refinance an ARM home loan?
The biggest problem is the fact that many properties across the country have fallen dramatically in value, some areas by as much as 50%. Keep in mind that most investors used 95-100% loans to buy their properties, now they owe much more than the loan is worth than the house is worth.
Credit restrictions have also been tightened and many of the low documented or stated income loans used by people to purchase these homes are no longer in existence. That means if they cannot[provetheircurrentincomeordonothaveadequateincometofallintothecorrectdebt-to-incomeratiothebankswillnotlendtothem[provetheircurrentincomeordonothaveadequateincomefallintotherightdebttoincomeratiosbankswillnotlendtothem[demostrarsusingresosactualesonotieneningresosadecuadosparacaerenlarelacióncorrectadedeudaaingresoslosbancosnolesprestarán[provetheircurrentincomeordonothaveadequateincometofallintotherightdebttoincomeratiosbankswillnotlendtothem
What can an investor do who cannot refinance?
The best thing to do is call and talk to your current mortgagee. Many lenders are offering loan modifications to borrowers who have been good customers but may have fallen behind when their ARM was adjusted. Many times they will change your loan to a fixed rate or give you more time before your rate adjusts.
