Homeowners who have seen the value drop in their home have looked for ways to deal with their underwater mortgage situation. While many banks are hesitant to assist homeowners in some ways, concerning underwater mortgages, there have been options available like refinancing and short sale opportunities that can help homeowners who are in a situation where they owe more on their home than their home is worth.
It’s obviously a frustrating situation when a homeowner is in an underwater mortgage but there have been ways in which individuals in this predicament have been able to deal with their underwater home or at least make their mortgage payments more affordable. Some homeowners, due to the loss of their home’s value, have found meeting their monthly mortgage obligation difficult due to the type of home loan they have.
Understandably, some homeowners had hoped to refinance their home in order to take advantage of low mortgage interest rates that are currently being offered but due to having an underwater home loan traditional refinancing was usually not an option. However, certain refinancing opportunities from programs like the Home Affordable Refinance Program has allowed homeowners with an upside down mortgage to gain a more affordable payment.
Also, some homeowners have refinanced in certain cases but they had to put money toward their home loan at the time they refinanced. While in severe cases of an underwater mortgage the homeowner may not be able to benefit, some homeowners have been allowed to refinance, but again, were asked to pay money towards their mortgage if their home had lost a substantial amount of value. Homeowners in the financial position to take advantage have put money towards their principal, which may allow them to erase their mortgage debt faster and at less cost overall.
Yet, in cases where the home is simply unaffordable for the homeowner who is underwater, short-sale options have been made available from some lenders. In cases where a homeowner has lost value or they are unlikely to recoup any of the value that was lost, short sales have been offered so that homeowners can escape a bad mortgage situation.
While there are limited principal reduction offers in some cases, banks are often unwilling to take this route but would rather work on alternate refinancing or short sale plans for underwater homeowners. The good news for some is that no matter if a homeowner is attempting to get a more affordable mortgage payment or needs a way to escape an unaffordable underwater home loan payment, there are now more options available to help those underwater homeowners in need.