A VA REFINANCE ON AN UNDERWATER-HOME.. A GOOD CHOICE?

First, New Day Lending at 3.75% seems rather high.. Most of the VA loans I've priced in the past 2 months have been at 3.25%... As far as refinancing an underwater home, only you can say if it's worth it to you.. How long have you lived there? Do you want to move? What would you end up paying in rent if you had to find another place? Would you sacrifice your credit by doing a short sale or foreclosure to get out of that property?.. Only you can answer these questions.. This I will say for sure.. when it comes to major financial decisions, you should always look at the numbers and try to leave emotions out of it.. if you are underwater, and you want to preserve your credit, then you have no choice but to say put.. and if you are going to stay put, then refinancing to get a lower payment absolutely makes sense.. If you are thousands and thousands underwater, then you might consider getting out of that home.. so maybe you can consider a short sale.. you will take a hit credit wise, and you will have to rent for a few years, but it will get you out of a bad situation.. If your current loan is VA, and you short sell it or get foreclosed, then when you meet the mandatory waiting period, you wont be able to use VA for financing again.. since you would have used up all your entitlement on the previous home.. and for FHA, you need 3 years post Foreclosure/short sale to qualify.. for conventional, you need 4 years post short sale, 7 years post foreclosure.. Understand, these are just suggestions... you need to sit down with a qualified financial planner and let them analyze your complete scenario, so they can give you a list of options which might be best for you.. I'm a Broker here in Scottsdale AZ and I only lend in Arizona. If you or someone you know is looking for financing options, feel free to contact me or pass along my information. William J. Acres, Lender411's number ONE lender in Arizona. 480-287-5714 WilliamAcres.com NMLS# 226347

I actually feel your pain! It is tough, even though it sounds like you are getting a refinance accomplished to continue to have a lower mortgage and combined PITI monthly payment. It seems tough as it may still continue to be pressure on your finances. Obviously, if you had more equity you could feel better about being in that position in that should your monthly income drop, you would at least be in a position to sell and get out from under it. In regards to William Acres very good answer, I would add I think you are putting out kind of an SOS. Like, "yes, you are glad to reduce your monthly obligation, but on the other hand you are in your 60s and uncertain about the future right now. If this loan feels like a lot of pressure for you then have you considered your other options? How bad do you want to stay in your home? Would you feel relief if you could arrange a short sale of your property? You may have to wait a couple of years before you could buy again but then you would perhaps still have a lot of your VA eligibility to purchase a retirement home with a monthly payment consistent with your retired or semi retired status. It sounds like you are thinking of pulling out of the loan to me, if you are worried this payment could still be a lot of pressure for you in the coming years. I completed a VA refinance with about $17,000 cash out and with them holding about 10% equity in the home. However, they lowered their monthly payment by $700 and they feel good about staying in the home for a long time to come.