I’ve been trying to refinance my Georgia home for at least a year. I have a 7 percent conventional mortgage with a big, locally based bank.
I’ve been told that my loan is a Fannie Mae loan, but I don’t qualify for HARP because my original loan was under a first-time home buyer’s program with a 3 percent down payment. I owe approximately $87,000, and various Web sites estimate my home’s value at around $74,000. My credit scores are excellent. How can I refinance?
Unfortunately, if you don’t qualify for a Home Affordable Refinance Program (HARP) loan, it will be difficult to refinance your property if you’re truly underwater. That’s because you don’t have enough equity to repay your original loan.
We don’t believe Web sites are the be-all-end-all when it comes to judging home values. In many parts of the country, home prices have risen to a point where many folks are no longer underwater. You should check with a local real estate agent who sells frequently in your neighborhood.
That said, some 10 million Americans are still underwater with their mortgages, and many of those live in Georgia, as you do.
The federal government has recently eased rules for the HARP refinancing process, and it’s possible that if you haven’t tried to refinance recently, your loan will now be eligible. Since your loan is Fannie Mae, you know that you have at least one important part of the puzzle.
Go to HARP.gov, which is the government’s new Web site for people who want to refinance and are underwater. The site recommends if you’re turned down for a HARP refinance that you try again. That’s good advice. It also suggests you try multiple lenders and provides a link to HARP-approved mortgage lenders. You should also ask for a HARP specialist, someone who can walk you through the process.
One cautionary note: Please have realistic expectations. Because you are underwater, you won’t receive the lowest interest rates you may be reading about. You can expect your interest rate to be around 5 percent, which will still save you a significant amount of money each month.
You should also know that you don’t need to go to your same lender to refinance. You should seek out a reputable mortgage broker or mortgage lender in your area and inquire about refinancing. When you do inquire, don’t give them your Social Security number. You should only give them your Social Security number when you actually apply for a loan.
Good luck. We hope that this time you’re able to achieve your goal of refinancing.
Ilyce R. Glink’s latest book is “Buy, Close, Move In!” If you have questions, you can call her radio show toll-free (800-972-8255) any Sunday, from 11 a.m. to 1 p.m. EST. Contact Ilyce through her Web site, www.thinkglink.com.