Some of the requirements of Enhanced Relief Refinance are:. The note date of the loan being refinanced must be on or after October 1, ;. This was a federal program that began in and ended on December 31, To be eligible:. A minimum of 15 months must have passed since the beginning of the loan;. The minimum loan-to-value ltv ratio is Fannie Mae has a new refinance option called RefiNow. It was made available on June 5, It helps people with lower income to qualify for a refinance.
Homeowners must have:. No missed mortgage payments for the past six months and no more than one missed payment in the last 12 months; and. The debt-to-income ratio compares your gross monthly income to your monthly mortgage payment.
In a Chapter 13 bankruptcy , homeowners might seek to strip the lien of an underwater second mortgage. This opportunity is only available if your home value is at or below the outstanding balance of the first mortgage.
The second mortgage will be treated as an unsecured debt. You can only successfully strip a second mortgage at the end of a bankruptcy case. If you are behind in making your mortgage payments, filing for Chapter 13 bankruptcy may help you pay back those payments via a year repayment plan. You also may be able to seek a loan modification if the bankruptcy court where you file has adopted a loss mitigation program.
An underwater mortgage is a mortgage loan wherein the outstanding loan balance is more than the property value. This means that the homeowner has no equity in the real property. This will be an issue if the homeowner needs or wants to sell the home. It is also an issue if the homeowner wants to refinance.
There are options available to people who have underwater mortgages and who are facing foreclosure or need to sell the home. Also, certain federally backed mortgages will allow a borrower with no home equity to apply for a refinance. Attorney Kimberly Berson. Kimberly Berson is an attorney with over twenty-five years of legal experience and a specialty in bankruptcy law and bankruptcy litigation. Take our screener or read our bankruptcy F.
Upsolve is a c 3 nonprofit that started in Our mission is to help low-income families who cannot afford lawyers file bankruptcy for free, using an online web app. Spun out of Harvard Law School, our team includes lawyers, engineers, and judges. We have world-class funders that include the U. To learn more, read why we started Upsolve in , our reviews from past users, and our press coverage from places like the New York Times and Wall Street Journal.
We are funded by Harvard University, will never ask you for a credit card, and you can stop at any time. It may mean cutting your budget down to the basics and putting all of your extra income toward your home. Take Julia and Todd R. As a result of the housing crisis in , their home value dropped significantly. On top of that, they had an adjustable rate mortgage, which means that their payment climbed as their interest rate increased.
It was completely overwhelming! They could have given up and defaulted on their payments, but they loved their home and decided to dig in. After knocking out all of their consumer debt to free up their income, they started throwing more and more money at their mortgage. Thanks to their hard work, they had enough equity in their home to refinance a few years later. Use our mortgage payoff calculator to run the numbers for your specific situation. The more money you can pull together to pay down principal, the faster you build equity in your home.
To qualify you must have made on-time mortgage payments over the past six months and no more than one late payment in the past 12 months. While we adhere to strict editorial integrity , this post may contain references to products from our partners. Here's an explanation for how we make money. Founded in , Bankrate has a long track record of helping people make smart financial choices.
All of our content is authored by highly qualified professionals and edited by subject matter experts, who ensure everything we publish is objective, accurate and trustworthy. Our mortgage reporters and editors focus on the points consumers care about most — the latest rates, the best lenders, navigating the homebuying process, refinancing your mortgage and more — so you can feel confident when you make decisions as a homebuyer and a homeowner.
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You have money questions. Bankrate has answers. Our experts have been helping you master your money for over four decades. Bankrate follows a strict editorial policy , so you can trust that our content is honest and accurate. Fannie Mae has a similar program but has paused it temporarily. What about government-backed loans? Certain government-backed loans may still allow you to refinance if your mortgage is underwater.
Some lenders do set a higher cap on streamline refinances, but the cap includes closing costs and funding fees that the lender rolls into the loan. These costs can put you even further into negative equity. But if you are struggling, a short sale can be an alternative to foreclosure. It can also take months before your lender approves the short sale.
In the meantime, you might rack up enough late payments that a short sale will do as much harm to your credit as a foreclosure would. And if the lender does approve the short sale, you might have to pay tax on the amount of the loan balance the lender forgives.
Your last resort is to simply walk away from your home and let the lender foreclose on it. Foreclosure will negatively impact your credit and remain on your credit report for seven years.
As such, you might find it difficult to rent a home. Paying some or all of your rent upfront, though, gives you a better chance at having your rental application approved. Important: One more option you can try before walking away is a loan modification. This is an agreement between you and your lender that changes the terms of your loan and makes your mortgage payment more affordable.
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