You have Options if your Home is ‘Under Water’

Do you owe more on your home than it is worth? Well, don’t start packing just yet. There are some options available to you, including the Federal government’s  Making Home Affordable programs.

Your upside-down  loan may be eligible for  refinancing.  The Federal Home Affordable Refinance Program, or HARP,  permits  qualified borrowers to refinance  their loan  from 105% to  125% of  their home’s current value.

To qualify for HARP  you cannot have any delinquent payments in the past 12 months and  either Fannie Mae or Freddie Mac must either own  or guarantee your home loan.

But, what if you have late or missed payments? HAMP, the Federal Home Affordable Modification Program, is available through various mortgage lenders. In order to fall within HAMP, you will need to  demonstrate financial hardship that puts your mortgage in imminent danger of default. The mortgage must be owned by Fannie Mae or Freddie Mac, or by others signed up with the U.S. Treasury to qualify for HAMP. You can check with your lender to determine if it participates in HAMP. Although the lender has ultimate approval of the changes to your loan,  the government gives incentives of up to $1,500 to lenders to process these loan modifications. The HAMP program is not a refinance, but rather a favorable change in the terms of your loan which can reduce your payments for as much as 60 months. The lender can make various  modifications to loan, including lowering your  interest rate, extend the length of your loan  or forgive some of the loan balance. There are some guidelines to fall within HAMP, such as  your home must be a primary residence, the monthly payments cannot be more than 31% of your gross income and your mortgage must be less than $729,750. You must also be able to demonstrate you are having difficulty making  your mortgage  payments.

Check with the Federal government website, http://makinghomeaffordable.gov, for details on how to qualify for HARP, HAMP, and other available government home loan programs.

If you  don’t qualify for HARP or HAMP, you  may have to find another solution….but do not just ignore notices  or letter from your lender. And for goodness sake, do not ignore a foreclosure notice.

As an alternative, many lenders are willing to offer some kind of loan recast or ‘restructuring’. If that does not work, consider a ‘short sale’, in which you sell your home for less than you owe; but, only with the lender’s approval. Short sales are generally better than foreclosures on your credit.

To make a ‘short sale’ work, you will need a real estate professional, like me, to navigate you through the intricacies of the ‘short sale’ process, which can sometimes be labor intensive and drawn out. But, do not despair, I can help you through it.

So, don’t give up, you have options and I am here to help. Just take a deep breath, stay positive  and give me a call. We will get through this together.

Our White Sandy Beaches

Mortgage Interest Rates at Historical Lows for those with Good Credit!

Over the past few months, 30 year Mortgage Rates have dropped to historical lows. Bankrate.com found that 30 year Mortgages for a new home are at approximately 4.59%. 15 year Mortgage Rates are hovering in the 4.05% range and Variable Rate Mortgages (5 years fixed and variable thereafter) are right around 3.64%. This means that despite the trials and tribulations of the United States residential market, there are great loan rates to be  found….so long as you have good credit.

Generally, these great rates are reserved for those with the best credit, such as people with credit scores above 720. People with credit scores above 660 can expect to still get very competitive loan rates.

The tough part is that most lenders now are extremely cautious about new loans and have tightened their credit standards to avoid the same problems they faced during the recent Recession.

To become approved for the best Mortgage Rates, you will need to get your credit score in shape and put in a little work. I can help you understand your credit and educate you about ways to improve your credit score.  So, let’s sit down together  and talk. It would be my pleasure to work with you to find your new home and a loan program that will fit your needs. Give me a call and let’s get working on your future!

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