Is your House Underwater in Connecticut – there are options!


As a loan officer in Connecticut I talk to people everyday that are underwater on their house. This means they owe more then the property is worth.  Everyday they ask me for solutions and I tell them there is good news. Here are some options:


Refinance Through Harp is an Option


If your mortgage is owned by Fannie Mae or Freddie Mac, the second incarnation of the Home Affordable Refinance Program (HARP) could widen your possibilities of qualifying for a refinance.


Here’s how: HARP 2.0 has eliminated the maximum loan-to-value (LTV) ratio for HARP loans, reports the Federal Housing Finance Agency (FHFA). This means that homeowners who were previously denied from the program because their home’s value was too low (relative to how much they owed on their mortgage) could now qualify.


And along with making it easier for homeowners to be eligible, HARP has also been extended until December 31, 2015. Originally, it was supposed to end in December 2013.


“More than two million homeowners have refinanced through HARP, proving it a useful tool for reducing risk,” said FHFA acting director, Edward J. DeMarco, in a press release announcing the deadline extension. “We are extending the program so more underwater borrowers can benefit from lower interest rates.”


FHA Streamlines are an Option


If you don’t qualify for HARP, you still have options – one of which is the Federal Housing Authority’s (FHA) “Streamline Refinance” program, which has looser qualifications than HARP


In fact, with an FHA Streamline Refinance, employment verification, income verification, and credit score verification are all not required, according to the U.S. Department of Housing and Urban Development (HUD).


So, what exactly is required for a Streamline Refinance? According to HUD, these are basic requirements:


  • The mortgage must be FHA insured
  • The mortgage must not delinquent
  • The refinance results in a lower monthly principal and interest payments or the conversion of an adjustable-rate mortgage (ARM) to a fixed-rate mortgage (FRM).
  • No cash may be taken out on mortgages refinanced through a Streamline Refinance


Veteran’s Affairs has Great Options


Members of the armed forces might be trained to deal with adversity on land, at sea, and in the air, but being underwater as homeowners is an entirely different ballgame.


Luckily, the U.S. Department of Veterans Affairs’ Interest Rate Reduction Refinance Loan (IRRRL) is a viable option that assists veterans who are underwater on their mortgage.


“It’s a very strong program, but you have to be a veteran currently in a VA (home loan),” Martin says.
If you fit both of those criteria, according to the VA’s website, the IRRRL program is designed to lower interest rates by refinancing existing VA home loans. The possible end result for the homeowner is paying a more affordable house note.
“By obtaining a lower interest rate, your monthly mortgage payment should decrease,” writes the VA’s website.
The biggest advantages of the IRRRL is that it doesn’t require a home appraisal or credit underwriting, according to Martin. If your home has negative equity, this facet of the program could prove invaluable for homeowners who qualify.


Call Today for a free consultation on what your options are.  We cover the whole state of Connecticut.


IMG_0126David Tortora NMLS 88166
Company NMLS 117273
210 South Main Street
Middletown CT 06457