Refinance your upside down mortgage while rates are low

Just when you considered housing loan rates could not go down anymore, they have strike record low levels once again this week, and every homeowner should take other look at their stream situation.

Homeowners refinance for many not similar reasons. Some wish to lower their payments. Some wish to shorten the life of their mortgage. Some wish to obtain some cash out. Some wish to pay off a Home Equity Line of Credit.

There are still great mortgage programs available in today’s market. One of those allows homeowners who have lost value to still refinance in to a descend rate. Freddie Mac and Fannie Mae have allow homeowners to refinance, even if they owe up to 125 percent of the appraised value of their home. It is estimated that more than 25 percent of homeowners in the U.S. owe more than their home is worth.

However, only Freddie Mac and Fannie Mae allow for the 125 percent limit, many banks and housing loan companies only enable homeowners to refinance if they owe up to or reduction than 105 percent of the value of their home (including us). Of course, all your standard other requirements still apply (debt-to-income ratios, credit scores, etc).

Click here to see who really holds your loan (it usually isn’t who you make payment to).

Homeowners who have a second mortgage can also refinance, but no cash is allowed.

There are many factors to ponder if a refinance makes sense. One is closing costs. Many people take a NO COST loan, but we suggest you not agree to a “no cost” loan unless you entirely comprehend the differences between a standard “cost” loan and the “no cost” loan. Neither option is right or wrong, but you can pay dearly for selecting the wrong one for your individual situation.

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