House Underwater? You Can Still Jump on Those Low Rates

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Many people with homes underwater think they have nowhere to turn. As they watch more and more borrowers jump to take advantage of the historically low interest rates, they just sit on the sidelines watching the show go on. As long as you've been keeping up on your payments, you do have a way to tap into today's historically low interest rates. The Making Home Affordable Program will help you refinance through the Home Affordable


Many people with homes underwater think they have nowhere to turn. As they watch more and more borrowers jump to take advantage of the historically low interest rates, they just sit on the sidelines watching the show go on.

As long as you've been keeping up on your payments, you do have a way to tap into today's historically low interest rates. The Making Home Affordable Program will help you refinance through the Home Affordable Refinance Program (HARP).

Even if you have a second mortgage, such as an equity line, all is not lost. You may be able to get help through the Home Affordable Modification Program (HAMP) and the Second Lien Modification Program (2MP). If you're unemployed there's also special help for homeowners through the Home Affordable Unemployment Program (UP).

Yes, it may sound like a confusing maze of alphabet soup, but if you're paying over 5.5 percent on your home mortgage or if you're stuck in an adjustable rate mortgage, now is the best time to lock in those low historic rates. If you find all this very daunting, the best way to get started is by seeking help from a HUD housing counselor. He or she can help you sort through the options and figure out which program or programs can help you keep your home and minimize your mortgage payments.

Do you qualify for HARP? Let's take a quick look at the eligibility criteria:
--You must own and occupy the home. It can be up to a four-unit home as long as you occupy one of the units.
--Your loan must be owned or guaranteed by Fannie Mae or Freddie Mac. You can find out if your home mortgage is owned by Fannie Mae by calling 1-800-7FANNIE or Freddie Mac by calling 1-800-FREDDIE. You can also look up your loan online at Fannie Mae's for Freddie Mac's websites.
--You must be current on your mortgage payments, which means that you haven't been more than 30 days late on your mortgage payment in the last 12 months.
--Your amount due on your first lien mortgage does not exceed 125% of the current market value of your property.
--You have a reasonable ability to pay the new mortgage payments.
--The refinance improves the long term affordability or stability of your loan.
--If you do have a second mortgage, then there are two additional criteria to qualify:
1) The lender that holds your second lien mortgage must agree to remain in a junior lien position.
2) You must be able to demonstrate your ability to meet the new payment terms on the first lien mortgage.

You may even be able to get some of your second lien mortgage written off with the Second Lien Modification Program (2MP), which is designed to work in tandem with HAMP. Right now only four banks are participating - Citi, Bank of America, Wells Fargo and Chase. Under this program the loan servicer may agree to extinguish a portion of your second lien. The servicer will make that determination after reviewing your situation.

The key is to make the first call and begin the process to find out if you qualify for any one or more of these programs. Don't delay. Take advantage of these excellent options to lower your monthly payments and the interest your owe. No one knows how long interest rates will stay at these historic lows.

Lita Epstein has written more than 25 books including The 250 Questions You Should Ask to Avoid Foreclosure and The Complete Idiot's Guide to Improving Your Credit Score.

Did you get loan modification help from a government program? If so, we'd like to hear from you. Find out how to submit your story to AOL Real Estate. >
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