Maybe the correct question is not, When should I refinance my mortgage? but Should I refinance my mortgage while upside down on my home mortgage? What are my real options and can I refinance with negative equity? To keep it simple, all we are trying to do is gain some financial advantage and possibly at the same time resolve some financial difficulty. It could be that all you really need is a little upside down mortgage relief for 5 to 10 years until the housing market reverts.

So How Do I Get Help With Mortgage Payments If My Mortgage Is Upside Down?

Assuming your mortgage is underwater you are probably better off to modify your home loan into a lower monthly mortgage payment without refinancing. There are no closing costs, you keep your same lender, if there is an interest adjustment or balloon coming up it is put off during the 5 to 10 years of mortgage reduction and you may be able to permanently reduce your interest rate or convert it to a fixed rate (if adjustable).

Don’t Hold Your Breath Waiting For Your Lender To Offer You This Option, He Won’t

In fact if you are current on your payments and you asked for a little upside down mortgage relief he probably said you do not qualify. This is not true but it is the most common response when you ask your lender for help. They may even state you have to be two or three months behind before they will “help you”. Not an option if you are trying to maintain good credit. Then when you are behind on payments, less than half the time will your lender offer you more than a 10% payment reduction and more often will modify your home loan into a higher payment because you are behind. What kind of help is that?

You have to know what to ask for, what you can negotiate, what you qualify for and what your lender is authorized to approve. Only then make a written submission with the proper documentation to support your request but only the information and documents you have to supply to be approved. You can disqualify yourself by supplying too much information that is not required or not supplying enough. This is where you may want to get some professional help, but I will offer you a little free help here that will get you started.

Find Out What You Qualify For Under The TARP Mortgage Reduction Program

Oct 2008 while the banks were getting bail out money, US Secretary of the Treasury, Timothy Geithner announced that under the new guide lines 70% of US home owners qualified for help with mortgage payments.

We have compiled a database of the mortgage reductions we have successfully negotiated since Oct 2008 under the TARP Mortgage Reduction Program. Under these guide lines having a mortgage upside down while remaining current on payments actually increases your chances of qualifying. With the data we have complied we know what modifications lenders are approving, the criteria required to qualify, what lenders are authorized to approve and what is negotiable.

By: Dan North

Second mortgages and home equity loans are perfect for homeowners needing money to make home improvements, eliminate debt, and so forth. These loans allow homeowners to obtain loans based on their home’s equity. Home equity loans and second mortgages are better than refinancing because funds are received in a few days and homeowners are not required to paying huge fees.

What are Home Equity Loans and Second Mortgages?

Home equity loans and second mortgages provide homeowners with a lump sum of money. For the most part, homeowners obtain these loans when needing to make a big purchase or wanting to consolidate bills. Credit cards and consumer debts have ridiculously high interest rates. Although second mortgages have interest rates higher than the original mortgage, the rates are much lower than those offered on credit cards. Thus, homeowner may obtain a home equity loan to pay off credit cards. Home equity loans and second mortgages carry a fixed rate and have an average term of three, five, or seven years.

How Do These Loans Work?

In order to obtain a home equity loan, a property must have enough equity. Equity is the difference between a home’s value and the amount owed to the mortgage company. For example, if a home is worth $120,000, and the amount owed to the mortgage lender is $80,000, the property’s equity is $40,000. Therefore, the homeowner is permitted to receive a home equity loan up to $40,000. There are instances when a home equity loan and second mortgage is granted for more than a home’s worth. These are 125% home equity loans. However, these loans carry a very high interest rate and the interest is not tax deductible

Homeowners receiving a home equity loan are required to make two mortgage payments. The first payment pays the balance of the original mortgage, whereas the second payment pays the balance of the home equity loan. Before applying for a second mortgage, homeowners should evaluate their finances and determine whether they can afford an additional monthly payment. Defaulting on a home equity loan or second mortgage could result in a lender foreclosing on a property.

By: Carrie Reeder