Most homeowners who purchased their homes before 2010 have lost some or all of their equity. There are several programs that allow homeowners to refinance without equity. If you're a homeowner whose home value has dropped, and you're stuck in your currnet mortgage, you may qualify to refinance without equity and take advantage of today's historically low interest rates.
How can you refinance without equity?
First, determine if you have a Fannie Mae or Freddie Mac loan. You can inquire online by clicking this link: refinance without equity. This refinance program is knows as HARP (Home Affordable Refinace Program). In order to qualify for the HARP program, there are a few things you need to know. Your loan had to have been acquired by Fannie Mae or Freddie Mac prior to June 1 2009. Also, in order to qualify for these programs, you must meet certain guidelines for the HARP refinance. Fortunately, the HARP refinance guidelines are more relaxed than traditional refinance requirements.
You have to have zero mortgage lates within the last 6 months and you're allowed to have a 30-day mortgage late within the last 12 months. Most lenders have "overlays", which are additional restrictions above what Fannie Mae and Freddie Mac require. For example, many lenders require certain credit scores or will restrict the "loan-to-value" ratio at 125%. It's critical to find a lender who has few overlays as this gives you the greatest chances of getting the best deal. For example, you want to find a lender who has no limit on the loan-to-value ratio. To get more information about the HARP refinance guidelines, click the link.
If you're looking to refinance your upside down mortgage, it's also important to work with a lender who is DIRECT to Fannie Mae and Freddie Mac. Many lenders are brokers or are not DIRECT lenders to Fannie and Freddie. This means there is a "middle man", and typically these lenders have higher rates and / or fees. Clearly it's important to search for the best rate and offer, but it's also important that you find out how long it takes for the lender to process the HARP refinance. Some lenders are 60+ days. In this case, time is money. And the sooner you can refinance without equity, the sooner you begin saving money.
There are other programs aside from HARP that allow homeowners to refinance without equity. One such program is the FHA streamline. If you're already in an existing FHA loan, this program is designed for you.
If you want more information on these programs, please call me or visit www.caharp.com. I have access to all of these government programs at very competitive rates. I've been helping homeowners reduce their mortgage payment since 2004 and love assisting people save money. For a free, quick and no hassle evaluation, please contact me 7 days a week.
PS - Ask me how you can eliminate 2 mortgage payments!
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