Mortgage Forum

SuzieQ

As many people are, we too are coming to the end of our first two years in our 2/28 loan with First Franklin. We bought our house in January of 2004 for $360k. At that time we had a first with New Century and a second (don't recall with whom). We re-financed after two years as our payments increased significantly, however, our credit was not that great at the time, due to some late payments. Both loans were rolled into one with First Franklin, which will hit the two year mark at the end of June. The current loan is a 50/30 Balloon 2/28 ARM in the amount of $404k. The initial rate is at 6.999%, but will change based on the 6 month LIBOR. That new rate will be calculated by adding 5.4% to the LIBOR index.Over the past 2 years we've worked to improve our credit scores which are now at 748 and 692 (for me and my wife respectively). My question, at this point, is are we going to be able to re-finance into something similar to what we now pay, or better yet less? With the home values having dropped so drastically I'm afraid we won't be able to re-fi at all. Is it possible for us to re-fi and save our home based on our credit scores?There have been 9 foreclosures within a 1 mile radius of us since January 1. The homes, in the area, that have sold to date have gone for about $415k so I've been told. I'm sure this is dropping by the day though.Having read through the forums, I am pretty sure we won't get through to First Franklin to modify our loan, especially since our payments have all been timely. Before I go searching bank to bank, I thought I'd ask here first and see if I can get some advice.Thanks to all that have posted here as it has been a wonderful learning tool. Thank you in advance to any advice that might be posted.Much appreciated!James