How can I refinance my mortgage when my home value is less than the loan value?
I'd like to take advantage of historic low rates and will go a long way towards lowering my monthly bills
Answers | 3
There are a couple of options that you have available to you. The first, which is generally not the preferred option for most home owners, is that you place a sizeable cash contribution into the proposed refinance, thereby reducing the "loan-to-value".
A second and more favorable option for most home owners, is to see if you qualify for the HARP program. This stands for Home Affordable Refinance Program and it is a standard Fannie Mae/Freddie mac program that specifically addresses refinancing for home owners who are underwater. I have written about this here on Money Tips and you can find additional information at knowyouroptions.com. I highly recommend working with a qualified loan officer to research qualifying for this program.
Lastly, there could be some other creative options available to you such as obtaining a line of credit to pay down the current loan and bring the value in line with a refinance. Again, speaking to a qualified loan officer will go a long ay in understanding all of these options and seeing what may work best for you. Good luck.