For this to work at the bank you have to be technically
in default. That's either underwater by 10 to 20% or behind in payments or both. Here's how much you have to be underwater.
If your total loans are $1 million and over you need a loan to value or LTV of 110%. If your loans are less than $1 million
but more than $500,000 you need 115% LTV. And if under $500,000 you need 120% LTV. The percents can be more but not
less than shown.
If you're behind in payments affecting your credit score and you are under
680 score you may need a temporary bridge loan until your credit is repaired and you have a new track record. If your credit
score is 680 or higher you could get a new 30-year loan from our bank or your choice of banks. There is a program available
to determine if you can qualify for that loan.
If you decide to go forward with this we will need a appraisal by a FHA Certified
appraiser and a three bureau credit report with scores from each. You will also have to complete a new application for the
loan and there is documentation to sign. We need your authorization to talk to the lender about your loan and you may
have legal expenses to obtain and restructure the loan, etc.,which would be detailed on the closing statement. The only
upfront cost or what you risk is for the appraisal for the bank and the credit report. You can say no to going further
at anytime until the new loan is closed.
What will you save by our stategy? About one-third to 40% of your loan
debt. See the loan example below.