80/20 ARM Loan $0 down High Rates 20 yr old investor, Am I Screwed?

I am 20 years old from washington, I managed to get a loan and buy a duplex w/$0 down 80/20 Arm loan 80@7.5% 115,000 and 20@11.5 32,000 Yes rates are very high but w/ 0 down and no assets I had to take what I was given. I will be paying interest for the first 2 years and I have no extra money to pay extra on top of my minimum payment. I am losing $. I rent out both units@$1125 + $115 water +75 add to mortgage payment so I'm losing $190 a month, I cannot raise rent it's already up there. I cannot refi for atleast 2 years or I have to pay 3600 penalty fee. I bought the duplex for 147,600 (including closing costs). It's been appraised at only 148,000 so I bought it at top dollar. Should I pay $3600 penalty and refi to get positive cashflow? Or just hold it up for 2 years and lose 200*24=$4800+maintenance fee's in 2 years? Any other suggestions I would appreciate it. Thanks in Advance!

Answer:
DO NOT REFINANCE!!. I own a mortgage company and can tell you to simply wait it out then refi. The loss your taking may be deducted from you income statement for tax purposes. Quite honestly I usually have my buyers who obtain 100% financing get the seller to pay closing cost. In two years you'll be fine as you're building some equity. You rates are in line for the financing you received. At 20 you doing well. Hang in there and do your best to make your pmts on time.
Like the other answer said Hang in there.
Suggest you visit DaveRamsey.com to learn all the ways you did this wrong, no matter what the banks said.
Suggest you get 2 more jobs work until you got to sleep.
Cause dude you are hanging in there by your tenants teeth.
Get extra money earned so you have reserve emergency (Cash) funds for when things go bump at night or weekends. Mortgage companies love these deals - they get your money and the house back at a profit . If anything goes wrong.
I know this cause I serve foreclosure notices on people with 80/20% loans and business is up .
Its kinda late to ask this kind of question - but seriously why did you buy this property if the numbers din't work ?
You bought the home for 147,600 and it is appraised now at 148,000.

1. You would have to come in at the closing with money...You do not have enough equity to have a "positive cash flow at this time".

2. Your pay off would be 151,200 with the pp added in to your loan amout.

3. You would have closing cost again associated with your loan. Estimate 3 percent of the new loan needed of 155,000 = 4600.00

151,200 + 4600.00 cc = 155,800.00 new loan amount at 7 percent 1 loan (no MI)= 1036.55

The only way to get this done, is if the home got appraised at a higher amount than the 147,000 you bought it for.

home values Just add 10-15 percent to the values on this site.:
http://realestate.yahoo.com/homevalues.

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