Can You Refinance Home Under Water?

[heydude]

I filled out a silly application on my bank's website for a refinancing of my home. It immediately stopped me when I put that the value of the home is less than what I own on it. Will any one give you a refinance loan with a lower interest rate if you are under water? What if you put money down on it or something?

Just curious.
thanks.

[fidgiegirl]

Well, not sure, but I wonder if what you need to look at is a modification?

I have only heard of one person successfully getting one, tho :(

[Lainey]

Have you looked at the federal H.A.R.P. program? harpprogram.org I believe it takes applicants who are underwater; don't know the details.

[redfox]

I'd suggest looking for an affordable housing organization in your community and calling them. Ask them which area non-profit can advise you about a loan modification. It's possible that your city dept. of housing, if there is one, will know who can advise you on this.

[jennipurrr]

There is a HARP thread on Fatwallet. It appears fairly complicated and apparently there was an older thread too, but it looks like a good refi option for people underwater.

http://www.fatwallet.com/forums/finance/1120151/

[heydude]

Thanks, it looks like HARP is only for freddie and fannie loans.

[redfox]

Don't give up. With the recent settlement by the Feds & 5 major banks, there are adjustments happening. Keep looking till you get a definitive answer! It takes work to get through this process... and it's worth it for many who get lower payments.

[jennipurrr]

Thanks, it looks like HARP is only for freddie and fannie loans.

Yes it is...if anyone is wondering if their loan is owned by either there are links in the fw thread that will take you to fannie/freddie websites that will let you put in your address and they will tell you if they own the loan.

Also, if anyone happens to own rental property, I was looking at the FW thread when I was posting it to this thread, and I started poking around in it...you *may* be able to refinance rentals with this deal if they qualify. If it works out this is one of the few options to refinance investment property without a huge amount of equity at favorable terms. I am considering it since rates are decently lower and one of my rentals has a second mortgage with a balloon that I was going to just chalk up and pay, but now may be able to roll into a lower rate loan...something I am going to look into anyway...if I can find the time!

[jennipurrr]

Thanks, it looks like HARP is only for freddie and fannie loans.

If your loan isn't owned by either of those two, did you get it through a credit union? They may work with you even if you are underwater.

[heydude]

so, you guys made it sound like my loan may be owned by freddie or fannie even though i was pretty sure it wasn't.

i thought my bank owned my loan.

guess what? I FOLLOWED THE LINKS YOU GAVE AND MY LOAN IS OWNED BY FREDDIE!!!!!!!!!!!!!!

REFINANCE HERE I COME!

WOW OH WOW, THANK YOU SO MUCH!

[Float On]

I really need to look into this as well.

[jennipurrr]

heydude, that is great to hear! I hope it works out for you!!

It is crazy how the banking system is these days...you (general you, me included) think you get a loan and the bank has it and you make payments to them and that's just how it works. But, no the loan is packaged and sold (numerous times) and a lot of times just serviced by the original bank, if that. Its really messed up I think.

[heydude]

I KNOW Jennipurr,

I mean, I am sitting here with "loyalty" to my bank. Thinking, gee, I'd hate to ever go with a different place. AND here it has already been rung out many times!