Refinance Mortgage

right now my family is at a very difficult situation because my dad could not find any construction jobs in the past year. we’ve been living off of our savings and now he hasn’t paid for the house in the past two months. he wrote the bank about refinancing the morgage loan and they offered him an interst-only loan… i don’t know much about these terms but how safe would it be? rght now he’s paying about $2000 a month and he hasn’t paid in two months. with the new loan agreement he doesn’t need to pay anything right but must start paying the interest amount of $1400 a month starting in august… of course the rate is adjustable and the interest rate is 4.75% now and can go up to 6 or 7% next year. if we don’t pay the house at all… we’ll lose it… so could he take this interest only loan and refinance in a few years to start paying for the principle amount again? or should we just go on ahead and lose the house…

Many of the homes that are in foreclosure right now were interest only loans. Interest only loans allow people to buy more with the thinking that they will not be in the house too long. Adjustable rates are BAD IDEAS. I would consider putting it up for sale and looking for something that fits your budget. It might mean becoming a renter, but that is something you have to consider.

we have an investment property and we do not want to have to pay more per month then we need to right now. in 3 years the Interest only part is up and we will have to catch up on principal and interest. Can we refinaince for another Interest only loan?

yes you can. You will have to pay clsoing costs so make sure it is in your best interest.

I have a 1st mortgage of about $100,000 on a condo valued at approx. $380,000. I have a home equity line of credit ( $20,000) that is interest only with no pre pay penalties. Can I refinance for a 15 or 20 year fixed?

Yes, but i’d go 30 years with a fixed rate and open end which means you can pay down the morthage anytime. Also request an amortization so you’ll have a break down between the principle/ interest.