How to Refinance without Equity

If you have gone through all the traditional routes trying to refinance your mortgage and have turned up empty handed, don’t give up hope just yet. There are still options or programs that are available to you to assist you in lowering your interest rate and obtain that lower mortgage payment.

There is a program available called the Home Affordable Refinance Program or also known as HARP. The Harp program is an excellent option for those home owners that qualify.  In order to qualify for this program, you must meet the following criteria

- You must currently own a one to four unit home with a loan that is guaranteed by either Fannie Me or Freddie Mac.  The plus of this is you do not have to reside in the home it can be a home that is being used as an investment or just your second home that you may just vacation at.

- You must be current on your mortgage payments and have no late payments over that last 12 months. However, if you have had your mortgage loan for less than 12 months you can have no late or missed payments within that time frame.

- Your new loan amount must not exceed 125% of the value of your home, which basically means that you can still obtain assistance through this program even if you have no equity in your home.

- Finally you must of course be able to demonstrate to the program that you have the ability to pay the loan.

If you find that you are going to be more than 125% above the value of your home, this doesn’t mean you will not be approved for the Harp Program. You can still be approved if the second mortgagor holder agrees in becoming the second in line when it comes to receiving the money. Which is actually what they are in the first place they are the second loan on the property because you already have a first lender. The probability on the second mortgagor agreeing to this is if your first mortgage is better than the one you had originally. You will still have to go through a load application and underwriting process and there will be refinance fees attached to the loan.

On a positive note, the HARP program will have no negative impact you your credit rating, while another program that many have been steered toward called HAMP which is a mortgage loan modification program which has an impact on your credit rating.

The Harp Program is an ideal alternative in attempting to reduce your mortgage payment especially for those that have been unable to obtain assistance through the traditional refinancing. This program has been developed to help you obtain that affordable and more stable mortgage loan then you originally obtained from your original lender..

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