Refinance an Upside Down Mortgage

CanĀ I refinance with my house being upside down?

1 Answer

The answer to this is a definite maybe depending on your individual situation. Since I am not aware of your exact circumstances other then your being upside down on your home mortgage, so I will let you know how getting a refinance is possible while being upside down so you know if you fall in to this category or not.

There is a refinance out there that is sponsored by the federal government, it is called the HARP program. Harp stands for Home Affordable Refinance Program and if your loan is owned by Fannie Mae or Freddie Mac then you *COULD potentially refinance this loan. The way to find out if your loan is owned by Fannie Mae or Freddie Mac is to go to the loan look up tool on the government website, which is www.makinghomesaffordable.gov by verifying if you Do or if you Do Not have them as your investor as these are the ONLY loans that potentially qualify for the refinance if you are at 125% ltv or lower, for simplicity purposes I will use this example. If your home is worth $100,000 then your loan needs to be at $125,000 when you try to refinance or less or you can bring in the funds required to create this level if you do qualify for this program. You must also qualify the same as you would for a refinance by providing incomedocumentation and completing a standard loan application, the only difference is they will let you be 25% upside down to do so. If your loan is NOT owned by the government then the options go way down.

There is a principal reduction program out there, but be aware many of these folks may not be capable of performing as promised, make sure you check them out as best you can to determine if they are the right fit for you or not, Good Luck to you!