Homeowners with an underwater mortgage may be able to benefit from the refinancing opportunities that are available through the Home Affordable Refinance Program, which is offered to homeowners who have a home loan guaranteed or owned by Fannie Mae or Freddie Mac. Homeowners that have seen the loss in their home’s value over the past months have grown very frustrated and many have been seeking solutions to their predicament.
However, homeowners who have an underwater mortgage are unable to benefit from traditional refinancing, which has helped many in good financial standing gain a more affordable home loan payment. Homeowners who have equity in their home, a good credit score, and can afford the cost of doing so have been able to, over the past months, take advantage of record low interest rates and refinance their home loan to a more affordable rate and payment.
Yet, those who have negative equity in their home have been unable to take advantage of these record low rates and, as a result, many have suffered when it comes to making their home loan payment. While there are some lenders who are offering principal reduction programs, refinancing opportunities like the Home Affordable Refinance Program from the Obama modification plan has aided many homeowners who were unable to meet their home loan payment.
There have been some homeowners who have been able to refinance their underwater mortgage to a fixed rate mortgage, which has allowed for a stable monthly mortgage payment that is both affordable and allows them to avoid the downfalls associated with the loss of value in their home. While some homeowners have opted to short sell their underwater mortgage, in the hopes of simply being free and clear of their home loan obligation, those who want to keep a roof over their head have benefited from these refinancing opportunities.
Homeowners who have lost value in their home and are underwater can consult the Making Home Affordable website for tools that will allow them to discover if they qualify for this type of refinancing or not. Again, homes owned or guaranteed by Fannie Mae or Freddie Mac can qualify for this type of refinancing, but homeowners are also advised to talk with their mortgage servicer about underwater mortgage assistance plans that may be available to those who do not qualify for underwater refinancing.