Government-backed programs can help with refinancing for homeowners who don't have equity in their property.
Homeowners whose mortgage balance exceeds the current property value know the futility of trying to refinance. Refinancing options for so-called "underwater" mortgages are limited because most lenders require some equity in the property - ideally about 20 percent.
However, borrowers should NOT give up hope. Options do exist, especially via the governments Making Home Affordable program.
First option: HARPIf you meet certain criteria, your underwater loan may be eligible for a refinance through the federal Home Affordable Refinance Program, or HARP. The program allows qualified borrowers to refinance a loan that is from 105% to as high as 125% of a home's value.
However, not every underwater loan qualifies for HARP. First, you must not be on the road to foreclosure: Any delinquent payments in the past 12 months will automatically disqualify you from eligibility.
Second, either Fannie Mae or Freddie Mac must own the loan. You can find a loan lookup tool and other calculators at the government's Making Home Affordable Web site.
Please don't hesitate to reach out to me if you have any questions or concerns about your current mortgage loan or have friend, family member or co-workers that are interested let me know. I can run a quick mortgage analysis and find out if you qualify. Look forward to hearing from you.
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