Going underwater is great fun if you are a kid in a swimming pool or you are skin diving in Maui. But it’s no fun at all if you are underwater on your mortgage.
Being underwater or upside-down on your mortgage means that you owe more money on your mortgage than your home is worth. Some sources estimate that 20% of all homeowners in the United States are upside down on their mortgage. 1 out of every 5 mortgage balances is higher than the home is currently worth.
And those numbers don’t include the homeowners whose current equity is between 0% and 20%. Many people have purchased homes with a 20% down payment to avoid paying PMI (Private Mortgage Insurance) only to have their homes fall in value resulting in their inability to refinance at lower rates without paying PMI.
The surplus of new construction, increases in foreclosure rates, and the oversupply and aggressively priced active listings of existing homes have caused a decline in home values across the country.
The good news for some homeowners is that the government has extended the HARP program until June 30, 2011. HARP stands for Home Affordable Refinance Program.
You may qualify for the HARP program if you have a conventional (under $417,000) Fannie Mae or Freddie Mac mortgage and are not currently paying PMI. If that is the case, you may be able to refinance at or close to the historically low mortgage rates now available, without paying PMI, even if you owe 25% more than your home is worth. If you have two mortgages or an equity line that would have to be included in the refinance you would not qualify.
We can quickly determine whether or not you qualify for the HARP program. If you have an adjustable rate mortgage or a fixed rate mortgage with a rate that is higher than the currently available low rates, you should check to see if you qualify for the HARP program.
Posted by Terry Brunner. Terry is a Senior Loan Officer with Horizon
Financial. Terry can be reached toll free @ (877) 627-9211 x150 or
email TBrunner@HorizonFinancial.org. Visit Horizon’s website at www.horizonfinancial.org
