The national average of underwater homeowners is just over 28%. Many of these people report feeling stuck in their homes and powerless to change their situation. But with the extremely low current interest rates, underwater homeowners can refinance and bring their mortgage payment to a manageable number.
There are several programs designed to help underwater homeowners refinance. If Fannie or Freddie owns your mortgage, you may qualify for the Home Affordable Refinance Program (HARP). Instead of the traditional loan arrangement, in which the bank loans 80% of the home’s value and the homeowner puts down 20% in a down payment, under HARP 125% of the home’s value is loaned as long as the homeowner’s income is high enough to repay the loan.
In addition to HARP, FHA loans have refinancing options. There are even refinancing options designed for people who have lost their jobs. If you owe more on your loan than your home is worth, discuss your refinancing options with a mortgage officer.
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