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Refinance with a Government Mortgage

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Since the housing and financial crisis erupted a few years ago government mortgage programs have supported refinancing for homeowners with low credit scores and insufficient home equity. With the economy still struggling to correct itself, millions of homeowners continue to strain under the burden of paying their mortgage every month. Millions more are contemplating whether or not they should try to save their homes from foreclosure especially when they are upside down on their loans – owing more on the property than its market value. If you want to save your home but are having trouble getting your bank to work with you, you may be able to get help from the government with a FHA refinance loan insured by the US government.

Consider New Government Mortgage Relief Programs that Won’t Last Forever

Many homeowners have been unable to refinance their adjustable interest rate because they do not have enough equity in their home to qualify for a traditional refinance loan. In an effort to assist these struggling homeowners in addition to reducing the foreclosure rates nationally a new loan relief option became available in the Home Affordable Refinance Program (HARP). This is one of the Obama mortgage programs set up to help the American homeowner refinance their home loans so they can stay in their home. This FHA refinancing program is specifically targeted to homeowners who have been limited in their options by their inability to qualify for a bank refinance through their lender. One of the main criteria for qualification for the program is that your loan must be owned by or guaranteed by Freddie Mac or Fannie Mae. If you are not certain you have a loan through them, you can use the online tool available at the Making Homes Affordable government website to determine if you do.

Get Approved for Low and Affordable Rates with FHA Refinancing

Other qualifications that need to be met in order to take part in the government mortgage refinance program include being underwater (not more than 125% of current market value) on your home and being current on your mortgage payments. You cannot have been more than 30 days late on any of your payment within the previous 12 months. People who have FHA, VA, or USDA loans are not eligible for the program. Last, but not least, you must be able to make the new payments every month. Typically this means you will have a job or some other type of regular income coming in.

In order to get the process started, you will need to contact the company that services your mortgage and ask about the HARP program. They will either take your information over the phone or send you a packet of information to fill out and return to them. It is important that you carefully consider the percentage rate and associated costs of refinancing to make sure you are getting the best deal. Lastly, the government refinance can negatively impact your credit as the lender will report your participation in the program to the credit agency. However, being able to stay in your home and make your monthly payments is certainly worth the temporary hit to your credit score. We suggest comparing loan offers from several experienced government mortgage lenders that have access to all of the FHA loan programs.

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