If a homeowner owes more than the worth of his house, the property is said to be “underwater”. Even though in today’s market, the value of housing property has recovered and this is one of the most profitable assets, still in this article we will deal all about refinancing underwater mortgage, so that you do not have to run to multiple sources to get your doubts cleared and you can easily get all your answers at one place.
Refinance Options When You Are Underwater
Do underwater mortgage refinance even exists and if it does, how can you procure such refinance? The major way through which you can refinance an underwater mortgage is through HARP or Home Affordable Refinance Program which is a government program offered by lenders through Fannie Mae. However, like all other government programs, even with HARP, you need to meet certain requirements to qualify for their refinance:
Your mortgage must already be under the Fannie Mae loan.
Your Loan-to-Value ratio must be >=80 %.
In the last six months, you should not have a late payment, and for the last 12 months, you are allowed only one late payment.
The mortgage must not be later than May 31, 2009.
The program ends on December 31, 2018 so in case you are thinking about refinancing underwater mortgage, we say you do it now.
Even if you do not qualify for HARP, you can still talk to your lender and ask him for some kind of loan restructuring. Some lenders specialize in refinancing such high LTV loans but you must do thorough research in order to find them. If nothing else works, find out if you can short sale i.e. you sell your house at market value or lower than what you owe, and the remaining loan balance is nullified by the lender. However, beware; such deals cause a blow to your credit score. You can also increase your monthly mortgage payments, for this brings a huge difference to the overall loan balance.
So, what are you waiting for? Check your eligibility criteria for low income mortgage loan, talk to your lender about restructuring, short sale and increase your monthly mortgage payments and lay your hands on mortgage refinance underwater.