3 Ways to Refinance your Home when you’re Underwater

Lowest Rates in 60+ Years

Interest rates are low. The lowest I’ve seen in my 16 years in business, by far. In fact, interest rates are lower now than any time back through at least the early 1950’s.  In short, if you haven’t refinanced yet, you should now!

But what if your home is underwater? Here in Southeastern Michigan, our home values have been hit especially hard, and many homeowners owe more on their mortgages than the house is worth. I talk to people every day who just want to know what they can do. Thankfully, there are a few programs that can help.

FHA Streamline Refinance

The FHA Streamline Refinance program is still alive and kickin’! It has been modified a good deal from it’s original state a couple of years ago, but it’s still a powerful program. Essentially, it allows homeowners to refinance their FHA mortgages with no appraisal, at all. Notable Restrictions: Minimum 640 FICO score, maximum Debt Ratio: 45%, Borrower must be refinancing a current FHA mortgage, Borrower must be saving at least 5% on monthly payments as a result of the refinance. No cash-out allowed.

FNMA DU Refi Plus

The Fannie Mae Refi Plus program enables underwater homeowners to refinance their mortgages. This program allows homeowners to refinance their loans up to 125% of the value of the house. Notable Restrictions: Minimum 640 FICO score, Borrower must be refinancing a current Fannie Mae backed mortgage, No cash-out allowed. Find out if FNMA owns your mortgage here.

FHLMC Open Access

The Freddie Mac Open Access program, like it’s FNMA cousin, allows underwater homeowners to refinance their mortgages. In most cases, the mortgage can be no more than 105% of the value of the house. However, special provisions do allow for up to 125%, although interest rates are not very attractive. Notable Restrictions: Minimum 640 FICO score, Borrower must be refinancing a current Freddie Mac backed mortgage, No cash-out allowed. Find out if FHLMC owns your mortgage here.

Questions or comments? Please leave them in the comments section!