Legal Question in Real Estate Law in Maryland
I purchased a home 5 years ago and put 100,000 down because i knew i could not afford a 210,000 house. I got a no document loan of 7% i did this because i needed to get my own place to get out of relatives home.
I did a refinance in 2009 and took some money to pay off debts. I now have a job but am struggling with to children and am always living on rotating lateness on all monthly bills. I got two payments behind last year 2010 and thought the bank would lower the rate I just found out what they did was tack 6 months in the rears but gave me a 40 year mortgage and my payments only dropped $47.00 a month. So I am still struggling.
I don't know what to do should I
sell the house and get an apartment?
Can I go to another bank and get a refi for a lower rate (which i think would be the only way to drop the payments more to what I can afford)?
Will any bank give me a refi and some extra to pay off debts?
Help worried sick!
1 Answer from Attorneys
Thankfully options exist for people in such situations, particularly when mortgage rates are lower. While it is not necessarily a legal analysis, financing with another lender usually requires full income qualification which may be tough. A cash-out refinance is much harder to get than a refinance to lower the interest rate. However, prevailing interest rates are relatively low and government loans do offer certain options not available in other settings.
Loan modification may be an option though it often involves the scenario you describe already -i.e., rolling over past due monies to the end of the loan. A refinance generally offers a more long-term solution.
The very first step is to figure out who owns your mortgage (note that this is not necessarily the bank/servicer you send your payments to). You may also want to contact Maryland's free hope hotline to get in touch with a housing counselor. The hope hotline offers free resources to homeowners facing foreclosure.
The MD hope hotline can be reached at 877-462-7555. Alternatively you are welcome to contact my firm at 410-216-7000 for a no-cost consultation of up to 10 minutes on real estate matters.
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