Hi Katklaws,

Your intentions to do your homework are noble & worthy... if only everyone at least cared as much as you do!

NOW... having said that... you appear likely to be trying to bite off far more than you may really be ready to digest & integrate for your best results. Mortgage & equity rebalancing/refinancing is all too frequently done poorly by mediocre LENDING agents (who are at minimum licensed for the process... if not actually financially trained.) The non-financially-trained public is up against steep odds.

FIRST OFF... *how* your details play out is actually much less of an issue for you at this point than *IF* you will actually qualify, given your recent late mortgage payment (which may indeed kill all options until you have that in your past by a minimum of 12 months, maybe 24.)

MORE IMPORTANTLY... your best-rewarded efforts will come from diligently shopping a trustworthy & competent loan planning professional... rather than trying to teach yourself everything such a professional would have to know.

The most important aspect of your refinance is the expertise of the person putting it together.

Luck!
Dave Donhoff
Leverage Planner

Thank you Dave! I really do respect your expertise & integrity. Thanks for your advise & taking the time to answer.

I suspect that finding someone trustworthy & competent will not be an easy task.

I am that person that must be walking around with the word "Naive" on my forehead! Having been burned in the past, makes one cautious, suspicious, & insecure in their ability to trust their own decisions.
They say there's a sucker born every minute & I am living proof! I will need the Luck. And, Thanks again!

Unfortunately, if you own more on your house than it is worth and your current lender won't work with you, it is basically impossible to refinance. No other lender is going to give you more money than your house is worth. There is no hurt in shopping around, but I think you are going to be frustrated by your lack of options.

As a practical matter, I think your best course will be:

Continue to pay down debt.
Continue to make payments on time.
Hope the housing market rebounds a bit in the meantime.

If you can do those things, you'll be in a much better position a year or 2 from now.

On an investment property, I was "underwater" when the lender decided the property had dropped 25% in value from the purchase price. I had three alternatives--sell it, lose it or come up with the extra equity. I chose the last alternative.

Unfortunately, I agree with Bill. If you are underwater, the Home Affordable Programs are your only hope at the moment. And if your current Lender wouldn't do the loan, you are probably not going to find anyone else to do it. But you should definitely ask around.