Mortgage refinancing opportunities may be available for certain homeowners who have seen their property’s value decrease and are now in a situation where they have negative equity in their home. These underwater homeowners have been in situations where they are finding it difficult to meet their monthly mortgage payment as a result of the type of mortgage attached to their underwater home.
Yet, programs like the FHA short refinance program and the Home Affordable Refinance Program have been implemented as a way to offer homeowners with an underwater mortgage the chance to obtain a more affordable payment through refinancing.
Traditional refinancing on underwater home loans is usually unavailable due to the fact that, again, a homeowner has negative equity. Yet, solutions through these underwater refinancing programs have allowed certain individuals to refinance their mortgage through specific underwater refinancing opportunities and, as a result, find a fixed rate mortgage which may be more affordable.
There is concern though as some homeowners have grown so frustrated with their mortgage situation that they have simply strategically defaulted on their underwater mortgage and walked away. This has been the case for homeowners who have seen severe decreases in their property’s value or who may be denied assistance through underwater refinancing plans. While there have also been proposals for principal reductions, many banks have said that they are unwilling to use this form of underwater assistance on a large scale.
However, in the coming months it’s hoped that more homeowners will find opportunities to refinance their underwater mortgage if a situation is present where a homeowner is having difficulty making payments and may default without aid. While not all homeowners have been successful in finding solutions to their underwater mortgage, with national and state plans available to assist underwater homeowners, there are now more opportunities which can help homeowners with negative equity in their home.