Homeowners who have seen the value of their home drop and are now facing an underwater mortgage may be able to refinance their home loan for a more affordable underwater mortgage payment. Fannie Mae and Freddie Mac are offering refinancing opportunities for homeowners whose homes are either owned or guaranteed by these mortgage companies.
It goes without saying that an underwater mortgage is a frustrating situation for any homeowner and many have grown so aggravated with the loss of value in their home and owing more on their home then their home is worth that they have simply walked away. This can do a great deal of damage to one’s credit score and may prevent someone from getting a home for years down the road, even if they are able to afford it.
It’s for this reason that lenders in the Making Home Affordable Program have implemented plans to help homeowners deal with an underwater mortgage or work with their lender so that they can sell their home and be free of underwater mortgage debt. While refinancing an underwater mortgage is not available through traditional refinancing options, these underwater mortgage refinancing plans through Fannie Mae or Freddie Mac can be helpful for homeowners who qualify.
Yet, homeowners who may not be able to refinance their underwater mortgage or whose home is not owned or guaranteed by Fannie Mae or Freddie Mac may be able to obtain a principal reduction or some other form of underwater mortgage assistance from their personal lender. If a homeowner has little options left and either cannot obtain mortgage assistance for their underwater home or wants to be free of owing more on their home than it’s worth, there may be a short sale options available in this case.
While it is difficult when dealing with underwater mortgages, and many lenders are still struggling to find the best route for handling this problem, there are avenues available to homeowners who are struggling with a home that has lost value. It’s often advised that homeowners in this situation talk with their mortgage lender or consult the Obama’s Making Home Affordable Website for more information on assistance plans that are available.