Question by irobot: Refinancing under water mortgage?
I am like millions of homeowners who are under water on their mortgage. I have been trying to get refinanced to take advantage of the lower rates. My current Loan/Value ratio is 107%, which I am willing to pay down to 105%. I have been current on all my mortgage payments & have excellent credit history/scores. Based on this, I was confident to get refinancing. But I got rejected because my original loan had mortgage insurance.
A friend told me about this program called HARP (makinghomeaffordable.gov). I checked the eligibility criteria and it tells me that I do qualify to get refinancing – 1) My loan is owned by Freddie; 2) My house is our primary residence; 3) I am current on the payments; 4) 1st mortgage is below 125% of home value; 5) I have sufficient income & excellent credit.
I would be grateful if you could share your experiences / advice please. Is there a real clause in the rules regarding mortgage insurance on 1st mortgage?
Answer by linkus86
I can’t share an experience but you may want to hold off on the plan as Obama is actively trying to allow underwater borrowers like yourself to refinance with a government insured loan and being able to forgive 10% of the loan.
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