How to Refinance a Good Mortgage Gone Bad

by Single Parent Homeowner

Ask Kate how to refinance a good mortgage gone bad: Kate, While trying to refinance my mortgage, I have been working with one lender for over a month. Every day there is another thing they need from me. I only want to borrow a small amount. But since my home loan was to close a few weeks ago, I did not make last month's mortgage payment.


Single Mom Homeowner continues... Furthermore, my current lender does have my account marked as pending payoff for next week. As a result they've reported me in nonpayment verbally today when the new mortgage lender called them.

However, it is not on my credit report at this time because I checked it last evening. Tomorrow, I am paying last month and this month's house payments. Last month's would have been current, but the refinance was supposed to close. Therefore, I will have two late first mortgage payments and no second mortgage payments late.

How to Refinance a Good Mortgage Gone Bad

I am a single parent trying to pay the way for two children in college including vehicle insurance and tuition.

Yes, I had two late payments, but the house is valued at $200,000 - which is low because of the economy. In good economic times, my house would be worth $230 plus.

Furthermore, I was only trying to borrow $79,000. I am asking for no additional cash. Your advice will be greatly appreciated.

Also, I retired from teaching at age 50 last spring with permanent lifetime retirement, and I currently have my own business where I work part time as a signing agent, so I do have addition money coming income per month.

I welcome your advice and if you know who might give me a decent interest rate, please let me know. My first mortgage of $45,000 is 5 percent which is okay, but the second of $24,000 is at almost 9%, which is my concern. That was the purpose in putting the two together at a lower interest rate.

Kate Answers: How to Refinance a Good Mortgage Gone Bad

***zz-portrait-left.shtml*** Dear Single Parent Homeowner,

Did your mortgage representative tell you not to make your mortgage payment during the refinance? If so, that's a risky piece of advice.

Tie a string around your finger to remind yourself that late monthly house payments during a refinance can derail, as you found out, an otherwise smooth process.

How to Talk with Mortgage Lenders

But you still have many good points that should interest a lender. You are attempting to borrow less than 50% of the value of your home. You have a strong work history and even after retiring, have more than one source of income.

Even though you had a hiccup on last month's mortgage payment, you have a spotless mortgage history. This is the case of a good mortgage gone temporarily bad.

Keep in mind, mortgage lenders are more skittish over credit issues, especially late mortgage payments, than they've been in many years. So it will be your task to convince a lender that missing one mortgage payment was indeed an isolated incident.

While the recent details are fresh in your mind, create a timeline of the mortgage process thus far. Include conversations, dates of multiple document requests, and any advice you may have received about not making your monthly house payment. Attach a copy of your credit report showing no previous late mortgage payments.

The Secret to Getting Low Mortgage Payments

This is not the time to be modest. Toot your horn. Make a list of your assets, describe your work history, your sources of income - just as you summarized them for me. But go into more detail. With this in hand, ask to speak with supervisors until you find someone who will listen and has authority to make decisions. Face to face is best but you may have to settle for over the phone.

However, if you feel you have hit a brick wall with this lender, talk with friends and ask for referrals. Call the Realtor who helped you buy the house originally and to find out which mortgage professional they would be using.

As you shop for lenders, remember, the lowest quoted mortgage rate sometimes is just that! Only a quote. You want to know you are getting a stable and affordable mortgage that you can eventually pay off. Go here to Easy Path To Low Mortgage Payments because knowing what to ask is the secret to getting the mortgage you want and deserve.

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Best wishes,



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HARP Eligible? Working with Bad Credit.
by: Cinderella from Cleveland, Ohio, USA

My credit score just took a big dive. I'm on the hook for my daughter's student loans, I have a high debt to income ratio, I have 1st and 2nd mortgage, and I'm underwater. I work and have an okay income.

I'm trying to settle some credit card debt in order to pay Sallie Mae private cosigned loans. Therefore my credit score is low and getting lower. My 1st mortgage company sent me a letter saying I may qualify for a HARP refi.

Should I give it a try or will I be denied because of the credit cards?

Hi Cinderella, Kate here...

Yes! Try! What do you have to lose? But before you make HARP application, go through the pointers on this page. Make a good first impression with your lender!

Best wishes, Kate

Click here to add your own comment.

You can also ask Kate about your mortgage at How to Improve Your Credit Rating with Amazing Success.

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