Refinance Your Underwater Investment Property
When the housing market in the United States crashed, many people realized the fact that their homes were not as worthy as their mortgages. This was not a new situation in the country; however, today things have changed. Here we will review refinancing underwater investment property.
Unfortunately, many people who are trapped with their mortgages prefer to let the mortgage providing companies go for foreclosure. Alternatively, these people have started to move away from their homes before the procedure starts.
The new and present rules for refinancing investment property underwater allow people to benefit from refinancing underwater loans. Usually, it is impossible to find conventional underwater loan refinance even during the greatest economic boom. Moreover, the banking institutions have revamped the lending practices for prime customers too. The mortgages now only cover up 80 percent of the total value of the property for either a refinance or a first mortgage.
This condition evades most of the refinancing investment property underwater plans, in spite of the well-established credit ratings of the customers. Low credit ratings and late payments make it even more difficult to refinance underwater property. Lately, Federal government has initiated an exclusive program to assist people with refinancing investment underwater plans. This has been incorporated as a part of their financial stimulus plan.
HARP For Refinancing Underwater Property
The HARP (Home Affordable Refinance Program) assists people with underwater refinancing loans when their mortgage balance falls between 105 percent and 125 percent. Practically, not many people will be able to benefit from this program, but they still will be able to at least retain their homes.
If a person is interested to refinance underwater loans under the HARP program, the amount of mortgage must be sufficient. Any late or no payments will disqualify them automatically from the eligibility of the program. Your loan must be backed by any mortgage agencies sponsored by the government. Most people are unaware of the agency who owns their property. They can get this information very easily through their lender.
In order to secure refinancing investment property underwater loan, you will need to have a stable credit score, whereas some lender rules will also apply. People can also simplify the refinance investment property underwater loan through their present lenders, whereas they can also go for other financial institutions.
If your credit score is less than 700, you should focus now on raising your score. Having your score taken care of, and getting 30-50 more points, mean getting more smiles from the lenders, and get better rates! The credit restoration process is not an immediate wam-bam process. It can take as little as 37 days, or even months if you do not follow a professional guide.
The great part about cleaning your credit is that it can be done alone, you do not need expensive companies or pay hundreds of dollars for such services. Once you buy a good Credit Repair guide! you can follow the steps and expect your credit score to improve.
Modification Program for Underwater Investment Property
People who are interested in taking up refinancing their investment property underwater loan, but are not eligible for the HARP program, might be able to benefit from HAMP (Home Affordable Modification Program).
However, the loan must be backed by similar government agencies or through another lender that is eligible for the program. HAMP (home Affordable Modification Program) is supported by the government, but it does not fall into refinancing investment property underwater category. Instead, it is a loan modification plan which changes the home mortgage terms permanently.
Underwater Property Refinancing Conclusion
If you qualify for a refinancing underwater loan, you must hire a mortgage broker in order to make the process simple and hassle free. A mortgage broker will help you immensely to get the best terms and rates.
So What Is The Next Step?
If you will do nothing.. don’t expect anything to happen. You must bump your credit score up! It will give you better leverage when facing the lenders, and better negotiation position when applying for any financial need.
Lets not forget you are probably paying $500-$1000 extra per year in higher interest rates, and credit payments to those rich credit companies pocketing your payments hoping you keep doing nothing.
If your score is below 700, you might want to clean it yourself – get this ‘Credit Repair University’ which will save you money and time.
Yes, you might need to invest a small sum to get a grip of things.. But if you think education is expensive.. try ignorance..
You are probably paying thousands of dollars per year in fees and interests to credit companies which could be going straight to your pocket. Don’t be cheap when it comes to financial education.. Ignorance costs more.