Refinancing underwater condo

[kirko]

Hello,
I need a professional/educated opinion on my situation.
I live in a condo in Boston area.
I have 1 year left in 5-ARM mortgage before the rates start going up.
One mortgage is $30K @ 7.5% and the second mortgage is $160K @ 4.75%.
The problem is that I owe ~$190K while the condo is worth ~$170K and both mortgages are NOT backed by Freddy or Fenny (so I don’t fall in this “Obama plan” bracket).

My credit score is above 800 and my annual income is $85K. I have zero credit card debts and very little savings (I recently finally paid all my CC debts). What are my refinancing choices, if any?
It’s very frustrating seeing how other people can easily refinance just because they have mortgages backed by Freddy/Fenny.

Thank you.

[RefinanceRight]

Refinancing is very hard to do regardless of the situation if you have a 2nd mortgage. Pay off the 30,000 one with a lower rate personal loan and then go refinance the bigger loan

[MiikeB]

You have a year, focus that on paying off the second mortgage and saving as much as possible, look around for a good opportunity to refinance and when it comes do it. There really aren't many options right now for you to refinance in this situation.

[tmango]

I would offer some advice, but I keep imagining an underwater condo, hehe. I would live there.

But more seriously, I know COLA is high in boston, but it seems you should at least be able to continue to afford it. Are you sure your rates will go up when it resets? I thought that it went to current rates, which shouldnt be too much higher than what you are paying. I could be wrong though.

[kork13]

Originally Posted by tmango

Are you sure your rates will go up when it resets? I thought that it went to current rates, which shouldnt be too much higher than what you are paying. I could be wrong though.

I believe it depends on what index the mortgage follows. If it's the 30-yr treasury, yes--the rate is currently very low. If it's the LIBOR (most are), I think the rate is a little higher at the moment....

[kirko]

Originally Posted by tmango

I would offer some advice, but I keep imagining an underwater condo, hehe. I would live there.

But more seriously, I know COLA is high in boston, but it seems you should at least be able to continue to afford it. Are you sure your rates will go up when it resets? I thought that it went to current rates, which shouldnt be too much higher than what you are paying. I could be wrong though.

What's COLA?
But yeah, I will be able to afford it... I just don't like giving away my money to the bank if I could do something about refinancing.
Looks like I will have to save as much as I can and then get a lower interest loan for the rest of $30K. The second mortgage (160K) rate is very low to begin with, so even if it goes up, it'll still be very low for another year.
Thanks

[arthurb999]

You can bring the difference to the table and refi at 80ltv.

[ceejay74]

I'm in same boat as you; my 5-year ARM reset in November, and I'm nearly $20K upside down (stupid condo lost $45K in value), so I can't do anything about it unless I throw everything I've got at it before the next adjustment, and it's just not worth it to me. Mine reset from 5.0% to 5.75%, and I hope it won't go up too much more in November.