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Anonymous Anonymous Asked:

I have a 7-yr balloon due March, 2010, with current rate of 4% and (by then) a remaining balance of $260k. This was originally my home but is now a rental property. Home values in Michigan have plummeted. I have tried to refinance now to lock in a 30-yr fixed rate, but since it is considered a rental property, the loan/value ratio needs to be 25% and I'm no where near that. Since I cannot refinance now and definitely won't be able to when the balloon is due as values fall another 10%-20% (as forecasted in Detroit), what happens? (1) Can I refinance with my current lender for a 30-yr fixed with a reasonable interest rate now or in March next year? (2) Should I begin to have these conversations with the lender now? (3) Do they amortize the remaining balance over the remaining 23 yrs? (4) How high can the rate go? I have friends in a similar situation (with their primary home) and rates have gone up to 10%+? (5) How do I keep the rate down and amortize the remaining balance for 30 yrs? I do not know what to do. Any assistance is greatly appreciated. Thank you in advance. [West Bloomfield MI]

01/14/2009

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Answer Provided by: Drew Sygit [01/14/2009]
 

Too many variable to discuss via email. COntact me to discuss 248-356-3739 Drew