If a
mortgaged home has a pending loan amount greater than the free-market value it
commands then it can lead to a foreclosure if regular payment on mortgage
becomes impossible. This can be prevented if the borrower finds a lender, ready
to refinance an underwater mortgage. MHA, an initiative of the Obama
administration, is all about helping homeowners hold on to their homes, while
stabilizing the economy by boosting the housing market. Refinancing for
underwater mortgages might require serious efforts but the reward can be a new,
low interest, affordable loan plan. Once homeowners, with underwater mortgages,
study the difference in payments they realize that substantial savings is a
possibility. This is sufficient to evoke a mindful choice to refinance an
underwater mortgage, even when not forced by circumstance of cash crunch.
In a
situation where borrowers find themselves stuck with an adjustable rate, or
rate they are not comfortable with, when mortgage rates have been quite low, it
is reasonable to expect some initiative towards refinancing from borrowers. The
problem during such circumstances is want of sufficient information. Borrowers
should know that it is possible to refinance underwater mortgage through HARP
2.0(Home Affordable Refinancing Program 2.0) under the Making Home Affordable(MHA)
Program. The HARP is meant for homeowners who have been paying their mortgage
regularly but have been unable to get conventional refinancing because the
value of their home declined. To apply for a HARP refinance loan, borrowers
have to submit a loan application and underwriting process. There will be a
refinance fees towards the same.
To refinance
underwater mortgage, help can be sought through FHA( ) also. FHA Refinance for Borrowers in
Negative Equity (FHA Short Refinance) is for homeowners who have been paying
mortgage regularly but owe more loan amount than their home is worth, that too
when the loan is not insured or guaranteed by FHA. In such circumstances, FHA
Short Refinance may be an option that the mortgage servicer will consider.
Treasury/FHA Second Lien Program (FHA2LP) is for homeowners who have a second
mortgage and the first mortgage servicer agrees to participate in FHA Short
Refinance, when the homeowners may be eligible to have the second mortgage on
the same home reduced through the FHA Second Lien Program (FHA2LP).
The purpose of Refinancing Underwater Mortgages is to get
oneself a new, more reasonably priced, more stable mortgage. For this, relying
on expert guidance may be necessary. To select a suitable program can be
difficult with the complicated set of information associated with each of them.
Usually, experts are associated with leading websites, to guide borrowers about
the loan application and underwriting process. To arm oneself with proper
information, hopeful aspirants should read more on the topic
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