Tips for Underwater Borrowers Looking to Refinance

Underwater on your mortgage and still haven’t refinanced? Here are some lender tips from Majestic Home Loan on refinancing through HARP, a government-backed program to help underwater homeowners lower their monthly payments or lock down a low, fixed-rate mortgage
Do you owe way more on your home than it’s worth? You can still refinance through HARP (the Home Affordable Refinance Program) no matter how underwater you are.Moved out and rented your home? Is it a second home, a condo or an investment property that’s underwater? You can still use HARP.
You can easily check your initial eligibility yourself — it takes just a few minutes online. First, you need to know that your loan is owned by either Freddie Mac or Fannie Mae:
Second, you need to be able to answer yes to these three questions:
  1. Are you current on your mortgage payments? (No 30-day+ late payments in the past six months, and no more than one late payment in the past 12 months)
  2. Is the home either your primary residence, a one-unit second home or a one- to four-unit investment home?
  3. Did you close on your last home loan on or before May 31, 2009?
Contact Majestic Home Loan (the company you make your mortgage payment to) to confirm whether you are eligible. If your lender doesn’t offer HARP, contact another lender in your area — to get started.
Don’t put off refinancing through HARP because you think it will be difficult to do.
Start with one of Majestic Home Loan's licensed loan officers for an easy refinance process — for most homeowners there’s no appraisal and little paperwork. And, if you didn’t need PMI (private mortgage insurance) with your current loan, you won’t need it when you refinance through HARP, no matter how underwater you now are.
Don’t think you’ve missed the boat on a low interest rate. Rates are edging up, but keep in mind that you’re comparing them to the lowest rates in history. In three to five years, rates are unlikely to be this low.
So, you need to think long term. Even if you have a low, adjustable-rate mortgage (ARM), it could be worthwhile to refinance to a slightly higher fixed rate. While you may pay more in the short term, you’re likely to be better off over the long run if interest rates rise. You’ll have greater stability and the peace of mind that your rate won’t change in the future.
Check with Majestic Home Loan to find out your monthly payments with a new interest rate and closing costs (including how long it will take you to absorb any closing costs).  Our online mortgage calculators can help. Or, call us at 1-877-546-2145 and speak with one of our licensed loan officers today.

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