Are there any options if current lender rejects re-finance application because LTV below 80%?
by Mortgage Rates on Wednesday, November 17th, 2010 | 4 Comments
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No real options here. Look at it from the bank’s point of view: their risk HAS increased over the nine months of your loan because the house had decreased in value and their coverage is less than when they made the original loan. They don’t want to reduce your interest rate for increased risk.
Not sure if you’re asking the right question. The LOWER the LTV, the better.
Why would your lender request you to bring your LTV higher, to 80%?
Or, are you trying to say that when you bought your home 9 months ago it was 80% loan-to-value, and now it’s at 90% (since most homes have declined in value)?
If this is the case and your LTV happens to be above 80% now, and you want to refinance, there are several options/programs that can help (see website below). However, the mortgage must be owned by Fannie Mae or Freddie Mac.
A different lender may use different appraiser and you may get different result.
There is no real option other than to try later on and maybe next appraisal will be higher. Appraisals are subjective. .
If now your LTV is higher than 80% than no, there is nothing you can do unless you obviously think your property is worth more. That is the only way. But doing it that way you may have to pay for a full valuation/survey of your property.