Refinance your underwater mortgage: some options

The Homeowners Affordable Refinance Program (HARP) could save you a lot of money.  It allows you to refinance your home at a lower rate even if your mortgage exceeds your house’s current value.

To be eligible for HARP, your current mortgage must belong to or be guaranteed by government-controlled mortgage giants Fannie Mae or Freddie Mac. About half the nation’s mortgages are eligible. The company that services your mortgage should be able to tell you if you qualify.  You can also check at the websites below.  (The FHA has a separate underwater refinance program.)

There are restrictions:  Your mortgage can be no more than 125 percent of the value of your house. You must be current on your payments and have had no more than one late payment in the past year. You must have reasonably good credit and enough income to make the payments.   Second mortgages can make it more difficult but not impossible.

If you want to apply, contact the company that sends your mortgage bills first.  If they do not offer HARP refinancings, start calling mortgage lenders.

Also keep your eyes out for proposed loosening of the HARP requirements.  They are under active consideration right now.

To check if your mortgage is covered by HARP and to see if you qualify for the program check these two pages at the Federal Government’s Making Home Affordable website:

Comments are closed.