Q: My husband and I purchased our home a little over 5 years ago.

We were looking at refinancing since the rates are low now. We have run into a couple of problems.

First, we have two mortgages on the house since they would not cover the full amount of the loan for just one mortgage. Second, we owe more than the house is worth?

The loan company we were going to work with suggested that we call the first loan company and see if we could negotiate a lower rate, which in turn would lower the payment. Is this something that you think we should try and do you have any other suggestions.

A: We asked mortgage expert Ray Kuplaste to help us answer your question.  Here is what Ray told us:
There are several solutions to this problem depending on the type of loan they have and who the lender is:

Option 1: If the 1st loan is a Fannie Mae loan, you can refinance 1st loan only as a DU refinance plus, even if you are upside down.

Option 2: Call the 1st and 2nd loan note holder separately and try to lower the rate/payment.

Option 3: Call the 1st and 2nd loan note holder and try to negotiate a short payoff to be able to refinance.

Please note that options 2 and 3 will require some type of hardship in order to get the note holder to work with you.

Also note, for all FHA loans, you are able to do a Streamline refinance without an appraisal or income verification.

Ray Kuplaste is Vice President of Sales at UC Capital Lenders, a mortgage brokerage based in Philadelphia that specializes in residential and commercial mortgages.

You can call Ray at: 1-267-334-2500 or reach him via email: ray(AT)uclenders.com.