Yeah most of Maricopa County is in a declining area... Fannie Mae & Freddie Mac have reduced the max LTV's in declining markets by 5%, so if you were to refinance into their programs, it appears you'd have to bring in 5% of your home value in order to complete the refinance. Although the only way to know for sure is to submit an application and see what the automated underwriting findings say, because automated underwriting is what is used to determine if the area you are in is a "declining market" or not. It's census tract specific, so even though most of the area could be a declining market, a specific census tract within that market might not.
FHA doesn't adhere to the declining market guideline... and FHA will do a refinance at a little over 97% of your loan-to-value. FHA can permit a 2nd mortgage to 100% CLTV (actually the CLTV can be unlimited), so you could get an FHA 1st mortgage to just above 97%, closed simultaneously with a 2nd mortgage that goes to 100% CLTV, take a higher rate than normal on the FHA and have the closing costs paid for that way, and not bring any money into closing. The only problem could be finding a 2nd mortgage lender that will go to 100% CLTV with a BK less than 4 years out, the only lender that I know which still goes to 100% CLTV on 2nd mortgages requires 4-years from BK and a 720 credit score.
Message Edited by ShanetheMortgageMan on
01-21-2008 09:24 AM
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