Can I Refinance My Underwater Mortgage?

This is a huge change in policy and procedure. Previously under the Home Affordable Refinance Program guidelines, the amount of mortgage you could refinance was capped at 125% of the appraised value of your home.

Refinance your home without an appraisal under new HARP guidelines.

The big change is that appraisals will no longer be required. You can refinance your mortgage without worrying about the value of your home. Wow!

The realtor.org trade magazine has an article about this change and the CEO of the Minnesota Association of Realtors brought a Wall Street Journal article by Nick Timiraos to our attention.

Who’s eligible?
• Homeowners with loans backed by Fannie Mae or Freddie Mac can participate. (Homeowners can visit: freddiemac.com/mymortgage or fanniemae.com/loanlookup to determine if their mortgage is owned by either).
• Homeowners must be current on their mortgage.

This program allows homeowners who are current on their mortgage to take advantage of today’s lower interest rates, even if their homes have lost significant value.

The money saved from lowered house payments should help homeowners avoid the need to do a short sale or lose their home to foreclosure. Traditional homesellers will benefit because they won’t have to compete with as many short sales and foreclosures on the market.

Today, there are 665 active foreclosure and short sale homes on the market in Savage, Prior Lake, Lakeville, Farmington, Apple Valley, Eagan, Burnsville and Rosemount combined.

There may be some economic stimulus as homeowners purchase more goods and services with the extra money saved from refinancing.

Do you need to know if you should refinance? There is a formula used by mortgage companies which helps guide your decision. You can call me 612-889-6496 or use the Ask a Question form to request a personal evaluation of your situation. We are always happy to hear from you and will put you in touch with the best industry professionals.