Homeowners with an underwater mortgage have often sought a principal reduction as they see a loss in the value of their home as an example of inflated home prices. Homeowners have, obviously, been frustrated in this situation due to the fact that many homeowners believe since homes have lost value across the country, lenders should lower principal amounts to reflect a home’s true value.
While there are some mortgage lenders who are offering principal reduction for homeowners, not all are on board with this type of mortgage assistance. Frustrations have caused many homeowners to simply walk away from their mortgage obligation due to a loss in their home’s value but this is an option that should be avoided at all costs.
Despite not all lenders offering principal reduction options, homeowners do have alternatives for getting a more affordable underwater mortgage payment through the Home Affordable Refinancing Program. Traditional refinancing is not available for underwater homeowners so this program was enacted to give homeowners who have lost value in their home the opportunity to get a more affordable mortgage.
While there are also short sale options for homeowners who may want to be rid of their underwater mortgage, any homeowner who has seen the value of their home decrease over the past months but simply want a more affordable home loan payment may have options through the Obama Home Affordable Refinancing Program.
Homeowners may want to contact their lender about these options or consult the Making Home Affordable Website to see what this program can offer and how they should begin the road to getting a more affordable underwater mortgage payment.