Homeowners With An Underwater Mortgage Have Refinancing Opportunities For A More Affordable Home Loan Payment

Over the past months homeowners have seen the value of their home drop, in many areas across the nation, and as a result there has been a need for assistance to make these underwater mortgages more affordable. Since many of the nation’s top lenders are unwilling to use principal reductions on a wide scale to deal with underwater mortgages, an underwater mortgage refinance program has been created to assist homeowners.

While individual lenders may offer forms of refinancing for underwater homeowners, the Making Home Affordable Obama modification program has created an extension plan called the Home Affordable Refinance Program, which has been set in place to offer underwater refinancing plans to struggling homeowners.

This program offers homeowners with a home loan that is owned or guaranteed by Fannie Mae or Freddie Mac the opportunity to benefit from refinancing and obtain a more affordable home loan payment. Many homeowners mistake this refinancing opportunity as a principal reduction, but it needs to be understood that the Home Affordable Refinance Program does not reduce the amount a homeowner owes on their home loan.

In order to qualify for this refinancing program homeowners must not have a first lien mortgage that exceeds 125% of the current market value of their property. This statement, directly from the making home affordable website, goes on to mention that if homeowners fall into this category but also have a second lien on their home loan they may also still qualify and benefit from this underwater refinancing plan.

While homeowners who are delinquent on their mortgage are not able to take advantage of this underwater mortgage refinancing opportunity, there may be a chance for a modification on a home loan of someone who has an underwater mortgage and may be delinquent on their mortgage.

The Home Affordable Refinance Program has helped many homeowners with an underwater mortgage obtain a more affordable home loan payment, but his program will expire in June of 2011. While that is quite some time into the future, homeowners are often advised to contact their mortgage servicer early when problems began to arise. While current homeowners who are struggling with an underwater mortgage will, obviously, be able to meet its 2011 deadline, many financial analysts believe that the earlier a homeowner begins the process of obtaining mortgage assistance or seeking out a way to make their home more affordable, the better opportunity they have at keeping their home.