Your Questions About Mortgage Refinancing Programs

Ruth asks…

can I refinance my mortgage using the “Making Home Affordable” Program and make it assumable?

My current mortgage is not assumable but I qualify for the “Making Home Affordable” Program. When I refinance can I make my loan assumable? Thanks in advance

John answers:

I don’t believe there is any such thing as an assumable mortgage loan anymore and especially not under the HARP or HEMP programs offered by the “Making Home Affordable” Program.

It would serve no purpose to make your home loan assumable. The purpose of these affordable loan programs is to allow you to take advantage of the low interest rates when you either don’t have enough equity or you are behind in your payments. The two links below might give you some better ideas about how and why these home affordability programs can serve you best.

Susan asks…

How to get best mortgage refinance rates ?

John answers:

You may qualify for the government refinance program. You should check it out. I’ve attached an article that will help you figure out if you qualify.

John asks…

Obama’s mortgage relief programs?

Where can I go for free help? Do I start off calling my mortgage Co? I need to reduce my mortgage payment, or foreclosure wont be to far away.

John answers:

I have two solutions with which I have had direct experience: One…mortgage help. Contact one of the big lenders (Wells Fargo, Bank of America…) and ask about the HARP (Home Affordability Refinance Program). This program was set up by the Obama administration to get ppl either into a lower, fixed rate, or lower their mortgage payments. The Loan-to-Value ratio (which is the ratio of the value of your home vs. Your loan amount) is typically capped at 80% for a traditional refi. But under HARP, you can actually be underwater and still re-fi. The LTV allowed under HARP is currently at 125%!! Two….foreclosure. My wife and I were in a bad situation over a year ago. We opted for a short sale, which ultimately helps everyone involved, from you to the bank to your neighbors. In order to pursue this, you must already be 2 months behind in your mortgage. Then contact a real estate agent, and your mortgage company. Then get ready to move out and become a renter. It’s obviously not an ideal situation, but the home will sell for more that it would under a repossession, which will help the values of the other homes in the neighborhood. It is also only a 2-yr black mark on your credit, as opposed to 7 years with a foreclosure. Don’t be afraid to call your mortgage company. They can’t evict you over the phone, so just let them know what is going on. In the end, it’s pretty painless (outside of moving out).

Chris asks…

I owe 170k on my mortgage and it is worth 155k. What do I need to do to refinance?

John answers:

If you are having trouble making the payments on your mortgage (I’m assuming that is why you want to refinance), then you can seek a loan refinance or modification through the federal government’s Making Home Affordable program.

You may qualify for refinancing, but it will not lower the amount of your loan.

If you qualify for loan modification, it’s possible that some of the mortgage balance may be forgiven. But first, the lender or servicer will try to modify your mortgage by extending the terms or lowering your interest rate.

Sandy asks…

mortgage refinance with co-signer?

can a borrower with current questionable credit rating, due to loss of income, use a co-signer to qualify for refinance with fifty percent plus equity in home?

John answers:

No, on a mortgage loan, a co-signer (or non-occupying co borrower) can only be used when additional income is needed to qualify. Each borrower has to credit qualify on their own.

There are loan programs that will lend to lower credit scores, but more equity is needed and the interest rates are much higher which often negates the benefit of refinancing.

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