Upside Down? You Can Refinance Up to 125% of Your Home’s Value

Even if you owe up to 125% more on your mortgage than your home is worth, you may be able to refinance. For example, if your home is worth $200,000 but you owe more than that, qualifying homeowners can now refinance up to $250,000.

According to First American Core Logic, more than 15.2 million homes had negative equity in June 2009. This represents nearly 33% of all mortgaged properties across the country. Where in the past, being upside down on your loan would have precluded your ability to seek relief, you now may have an opportunity.

The Making Home Affordable program was initially structured to accommodate homeowners with a new loan to 105% of their home’s value. However, that amount has been increased to 125%. There are requirements to qualify including whether your loan is currently owned by either Fannie Mae or Freddie Mac. You can find out if your loan is held by either agency by visiting http://makinghomeaffordable.gov/loan_lookup.html.