How to Refinance Your 100% Mortgage
With the current events in the United States economy, many borrowers are finding it harder and harder to refinance to take advantage of lower mortgage interest rates. There are, however, a few options for borrowers who owe 100% or more on their current mortgage. Not every borrower will qualify, but it is worth a shot to take advantage of lower interest rates.
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Instructions
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Consult your current mortgage servicer to see if they have any programs available to refinance or renegotiate your current mortgage. Some will allow you to do a streamline refinance without an appraisal, which is beneficial to borrowers with 0 percent equity in their home. Others will simply allow you to renegotiate your rate without refinancing - which is even better, because the borrower can avoid paying closing costs.
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Research the Home Affordable Mortgage option made available by the Obama administration. This type of mortgage gives the borrower access to refinancing options that are not traditionally available. A borrower can qualify if his mortgage is up to 112 percent of the value of the home.
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Consider doing a refinance and putting extra money towards your mortgage. By making a down payment of as little as 3.5 percent, you can qualify for a FHA refinance. Additionally, if you have a USDA or VA loan, you may qualify for a refinance with 0 percent equity, depending upon your situation. Consult a mortgage lender to discuss these options further.
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Tips & Warnings
Bring a copy of your current mortgage statement, 2 months bank statements, 2 months pay stubs, and 2 years tax returns to your appointment with a mortgage lender. This information will allow a lender to quickly determine if you might qualify for a mortgage refinance without having to pull your credit.
Refinancing is getting harder and harder to do. A borrower may qualify on their own merits, but get denied due to their appraisal. Do not pay for an appraisal and continue on into the mortgage process if the lender does not give you reassurance that you have a chance to refinance. If you continue, you will have to pay for several fees, regardless of closing the loan.
