Underwater may not mean, out of luck!
If you find yourself underwater on your mortgage you may be able to find some relief by refinancing with a HARP 2.0 loan.
A traditional refinance path isn’t typically attainable when a home’s value is lower than the current loan amount on it. Originally, a HARP loan was designed to lower an interest rate on a home whose current loan-to-value (LTV) ratio is greater than 80%. The idea is that by lowering the interest rate the loan will allow a homeowner to keep making payments on the home and eventually arrive at a balanced LTV or better.
The good news is that with HARP 2.0 there is no longer a limit on the LTV meaning that anyone who is underwater is eligible.
A HARP 2.0 loan isn’t necessarily without its stipulations however-
- The homeowner must be current on the existing mortgage payments and cannot have missed any payments within the last 6 months and never missed a payment by more than 30 days
- Just as with HARP 1, your loan must have been owned/guaranteed by or sold to Fannie Mae or Freddie Mac before June, 2009
If you owe more money on your home than its current worth then a HARP 2.0 loan can help you stabilize your financial commitments and help you hold onto your investment.
Watch this video to see how.
