As it relates to a mortgage loan, the term “underwater” means that you owe more to your lender than your home is currently worth. It is a position many have found themselves in over the last couple of years as the economy took a downturn and home values declined as a result. It is a difficult situation, since you will obviously lose money should you sell your home. Many underwater homeowners who cannot meet their monthly mortgage payments could certainly benefit from refinancing, but doing so in this upside-down position is not easy.

There are a few programs for which you may qualify that would be well-worth researching. These programs can help you get a loan modification or refinance if you are underwater. Here is a brief summary of some avenues that may help, but consult your lender to determine those for which you may qualify.

Making Home Affordable (a federal program)

Two options currently offered through the federal government include: the HARP (Home Affordable Refinance Program) and HAMP (Home Affordable Modification Program). For more information, consult the Making Home Affordable website. Here are the high points.

HARP

There are a number of tight eligibility restrictions for this program. You must both own and occupy your house and your loan must be guaranteed by Fannie Mae or Freddie Mac. You must be current on payments and you must not have been more than 30 days late on any of your monthly payments within the previous year. Finally, the balance of your loan must not exceed 125 percent of your home’s current value (your lender can arrange an appraisal to determine market value). Consult your lender to find out if you qualify for the program and to request an application.

HAMP

If you have been late on payments or have other strikes against you, you may not qualify for HARP. If you are employed, you may qualify for this alternative program (HAMP) which is not a refinance, but a modification program. You may be able to lower your monthly payments to 31 percent of your monthly gross income. For some, this can equal hundreds of dollars a month and may be the difference between staying in the home and having to give it up.

FHA Short Refinancing

With the Federal Housing Administration’s Short Refinancing program, there is no limit to how far “underwater” you are, which is helpful to those in serious trouble. For a lender to participate, it must agree to forgive at least 10 percent of your principal (or whatever percentage it takes to bring the loan-to-value ratio on your original loan under 115 percent. Upon refinancing, you will have a FHA-insured loan with a fixed interest rate and a loan-to-value ratio that does not exceed 97.75 percent. To qualify, your payments must be current, your existing loan must be a non-FHA loan, and you will need a credit score of at least 500.

Loan Modification Through Your Lender

While you may not be able to refinance at this time, it may be possible to work with your lender to change the terms of your current mortgage agreement. The bank certainly doesn’t want you to default on your loan. The economic climate over the last couple of years has forced most banks to design new loan products to address what it is a growing problem. Consult your own lender for more information.

Charlie Adams is a tech guru and internet expert with a passion for writing and giving advice. He is also an avid writer and always makes sure to use a grammar checker to instantly proof his work for any grammatical mistakes. He is known by his friends to be a lover of Las Vegas’s buffets.

If you are considering refinancing your current home or personal loans, you should start looking at the many options available in the market. Fortunately, there are more than enough refinance products from various loan providers across Australia. As the competition among such products and lenders continues to intensify, borrowers and consumers are left with more and better choices when it comes to loan management and repayment.

Do not easily grab and take the first refinancing products you encounter or find. As always, it is advisable if you would first weigh the pros and cons of each refinance option you find. It should be your ultimate goal to find and obtain only the best deal.

What is Refinancing Comparison?

Refinance comparison is comprised of various tools and techniques that are aimed at helping you find and make the best decision in terms of refinancing. As mentioned, there are too many refinance products that are offered and provided by numerous banks and loan providers. If you would not exert effort to determine which option is the best for you, it would be possible that you would end up getting into a worse condition.

Numerous refinance loans make up for numerous options. You may find such loans difficult to distinguish and separate. Refinancing comparison is designed to help you easily see the best and bad features of refinance products. This way, you could easily and effectively tell which available options would be advantageous and which would be futile for your personal and financial situation.

Understand that not all refinance loans are alike. Some are better than the others. This is brought about by the intense competition that exists between loan providers. Many refinance products may initially seem attractive but in the long run they may tend to be inferior compared to others. The comparison should be thorough enough to see through the refinance options.

How Helpful is Refinancing Comparison?

As mentioned, refinancing comparison would help you make an informed and wise decision when choosing from a variety of refinance products. As it becomes more difficult to find the best refinance product, there are refinancing comparison tools that would help make it easier and more possible.

Such tools and techniques would look closer at all aspects of refinance products available in the market. They are comprised of special software and applications that may be offered by certain websites and loan providers. They could be composed of calculators and loan tables.

Refinancing comparisons should look at your personal and financial details when making calculations and instant assessments. You could possibly find out how much a refinancing option could cost you. This way, you could determine which refinance options would be least costly and would offer the best terms and conditions possible.

And what about other important features that may make or break refinancing options? Of course, they are never left out by refinance comparisons. Take advantage of refinancing comparison to determine the best time to refinance, to identify and best loan type to take, and know more about other offers that lenders/products present.

Andrew has been working as a refinancing specialist for several years. When he is not working, he loves sharing his knowledge and opinions online.