Earlier in week it was announced that the Home Affordable Refinance program would now accept applications from homeowners who are up to 25% under water on their mortgage. Meaning that you can still qualify to refinance your home even if the current value is up to 25% less then what you still owe.
Financial expert Suze Orman took to her blog to explain what this change means to the average American. You can check out a clip from her entry below, or click here to check out the full text and links to more information.
If you have a mortgage that is either backed or held by Fannie Mae or Freddie Mac, and you are still on-time with the payments, you may be able to refinance into a low-rate mortgage to help you stay in the home. When the program was launched in the spring your mortgage could be as much as 105% of the home’s current value (or to put it another way, you could be 5% under water) and still be eligible for the program But the government realizes that it needs to reach more people at risk of losing their home, so it has now expanded the acceptable loan-to-value (LTV) to 125%.
What to Do:
If you have were already turned down for a Home Affordable refinance because your LTV was too high, I want you to go back and try again. Make sure the lender knows about the new rule. Hey, print out this official release and show them.