Very basic question about refi

[woody]

I know this is basic, but you folks have been a great help so here goes:

If a homeowner’s ARM resets and they want to refi, but their home is valued at 20% less than their current mortgage balance, do they have to come up with the 20%?

Example:

$1M mortgage. Comps are selling for 800k and owner wants to refi. Is it even possible without shelling out 200k?

Thanks people,
woody

[PerryChase]

Yes, it is possible to refi if there’s an appraiser our there willing to appraise the house for $1M and the bank is willing to take that appraisal.

Some refis also do not require re-appraisal.

[Author]

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