Homeowners who have seen a loss in their home’s value have been looking for ways to make their home more affordable but due to underwater mortgages many homeowners have been unable to refinance their home loan and take advantage of the low interest rates that are currently being offered on mortgages. However, certain plans have been created from sources like the Making Home Affordable Program and the Federal Housing Administration to offer refinancing opportunities for homeowners with an underwater mortgage.
The Home Affordable Refinancing Program was created by the Obama Administration to help homeowners who have a home loan that is owned or guaranteed by Fannie Mae or Freddie Mac to refinance their mortgage to a more affordable rate. Numerous homeowners with an underwater mortgage are simply looking for a way to make their home more affordable but, again, having an underwater home loan makes this difficult.
Yet, these underwater refinancing plans that are offered from the Home Affordable Program can be helpful to certain homeowners if they qualify. However, not every homeowner with an underwater mortgage has a home loan guaranteed by Fannie Mae or Freddie Mac so the FHA has created an underwater refinancing program as well. Beginning in September, the FHA will allow certain underwater homeowners, who do not have an FHA home loan, the opportunity to qualify for a new FHA-insured mortgage, which could make their home more affordable.
Under the FHA’s program homeowners will have to be current on their mortgage payments and will require a lender to reduce some of the principal owed on their home loan. While there are reports that housing prices are slowly creeping upward, there are still many areas in our nation where underwater home loans are a huge problem and the increase in home values is nonexistent. For homeowners trouble with an underwater mortgage, these refinancing programs may be an option in which homeowners may find a more affordable home loan payment even in their bad situation.