YES - If your current on your mortgage but your bank won't let you refinance because your mortgage is "under water," here's how you qualify for the government refinancing program:
- Your home must be the primary residence
- Your loan must be owned by Fannie Mae or Freddie Mac
- You must have sufficient income to support the new mortgage debt
- You can't take cash out of the new loan to pay other debt
There's another big restriction, however, that will make many homeowners ineligible for the program: the value of your house can't have fallen much below the amount of the mortgage.
"The ceiling of eligibility is 105 percent of current market value of the property-so that's not going to help homeowners who have suffered home price declines," says Greg McBride, senior financial analyst at Bankrate.com. "Say you bought a house for $320,000. Your mortgage balance is now $300,000 But the house is now worth only $225,000. You are stuck, you can't refinance, even if you made your payments on time."McBride says the loan to value ceiling should be raised. "It should be something in the neighborhood of 150 percent," says McBride. It's too low to help people in Florida, California, Nevada and Arizona. Those markets are at the epicenter of the foreclosure crisis."
Still, if you do qualify, here's what you get:
- Your mortgage will be refinanced to 30 or 15 years with a fixed interest rate.
- The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender
- Rarely principle reductions.
