by The Ardvaark
Question by Roadfuzzz: Can a second mortgage be refinanced?
I have a mortgage and a second mortgage with the same lender. The two of them put together put me upside down on my home, so refinancing both wouldn’t happen.
The question is, to take advantage of today’s good rates, can I just refinance the second mortgage since it’s considerably less than the worth of my home? Are there any mortgage rules or anything else that would prevent me from doing so?
Answer by Glenn S
FHA, FreddieMac and FannieMae have special programs for refi’s for people in your situation. You can even be slightly upside down to be able to get these loans.
125% Refinance Home Loan Program (HARP Program)
In an effort to slow the trend of mortgage defaults and foreclosures, the federal government enacted the Home Affordable Refinance Act, which is designed to provide 125% home loans to borrowers refinancing with a home loan backed by Fannie Mae or Freddie Mac.
Refinancing under the 125% home loan program provides an opportunity for homeowners with negative equity to reduce their mortgage rate with a home loan up to 125% loan to value. The catch is that the 125% loan qualifying guidelines are strict and good credit is required.
I’d call your lender and see what they can do. Also call a few other lenders and see if they can help you.
What do you think? Answer below!