Are you still underwater?  Look up, life preservers have arrived!

If you haven’t quite caught up with the wave of homeowners who have recovered significant amounts of equity, don’t give up. There is hope. Programs have been developed that can help you see above the water line again and lighten your loan. Read on and see if any of theses programs relate to your current situation.

In this article we will look at two scenarios.

First, for those aware that you still have no equity even though the market has recovered somewhat, but you have worked hard and stayed current on your mortgage payments.

Second, those who are underwater and have fallen behind on their payment obligation.

Homeowners With No Equity

We begin with the homeowner who is behind on his/her payments and there is no equity in the value of the home; or it is worse and there is negative equity. Being “behind” in your payments rules out getting a standard refinance. But you can pursue the “modification” route.

First, call your bank or mortgage company and say that you would like to seek a modification to save your home. You may seek out an attorney who is well versed in this type of transaction because there are many problems that can occur. There have been instances where one representative of the lender says they will work with you and direct you to send in a reduced payment for a trial period of time.  However, a second member of the lender’s staff may begin foreclosure proceedings with no knowledge of the modification agreement. But again, if you are upside down and are behind in payments, you have very few alternatives. Your attorney can spell those out for you.

The more common situation in today’s marketplace is that you have no equity, but your payments are current. You want to take advantage of today’s lower rates, but again there is no equity to help secure the refinance.

Home Affordable Refinance Program

There are programs available to help you. And they have saved thousands of homes from foreclosure. The first is the “Home Affordable Refinance Program” otherwise known as “HARP”. This program rolled out a few years ago in the worst of the housing decline and was designed to help those who were underwater, but kept payments up to date.

So, if your home is financed through Fannie Mae or Freddie Mac and was purchased before 2009, you can get a refinance without an appraisal and take advantage of today’s reduced rates.

There is an easy way to see if your home loan is owned by Fannie or Freddie. Simple search on Google for: “Does Fanny Mae or Freddie Mac own my loan ?” Now, once you have refinanced under HARP one time, you cannot do it again. Why? The new loan is written after 2009 and the program is designed for loans prior to 2009.

FHA Home Mortgage Loan

Other segments of homeowners have their homes mortgages through FHA or V.A. Each offers “streamline” products as detailed in previous recordings in this series.

So, in almost every case there is a way refinance.  If you are unsure and do not know what might be available for you, call a mortgage company like RP Funding for a few minutes of free consultation.

There are still some of you that have mortgages that do not fall under the institutions noted in this article. You should have few challenges getting your home refinanced. The things to watch out for are closing costs and interest rates. Be sure to shop around.

How Do You Know if You’re Drowning?

Finally there are those of you who THINK you are still underwater but you are not. We have seen very impressive gains in housing prices in the past few years and have erased a lot of negative equity. Maybe you were underwater and you got discouraged, but now your home may have recovered and you just don’t know it.

There is a very good possibility that your home appreciated beyond the threshold and that you do have some equity once again. It never hurts to check. Because once you have equity, you are back in the driver’s seat and have many opportunities ahead –many of which are outlined in future articles.