How to Refinance While House is in Foreclosure
Thousands of home owners all across the US are facing foreclosures as the downward spiral of the housing market and the economy as a whole continues to plummet.
This has left many people who are on the verge of financial collapse wondering if its at all possible to refinance while house is in foreclosure. Well in these dark and gloomy economic times, there is a gleam of hope for some. It is actually possible to refinance while the house is in
foreclosure under certain circumstances.
Facing a forclosure is definitely bad news, however, the process for foreclosing a home will take several months from the time of the first missed payment to having the property seized. Therefore it is always possible to act quickly and research your options for finding a viable solution on how to refinance your home while there is still time.
In order for a refinance to be possible, you must have at least 20-30 % equity in your home at the time of foreclosure, and you must have at least managed to catch up on outstanding debts, such as regular bill payments and of course your mortgage payments. This can show that you are in good standing and are capable of staying current on your payments.
There are a few options available to you if your are looking to refinance your home.
You may want to start with your mortgage company. Since mortgage companies are not in the real estate business, they would rather not have to take on the responsibility of repossessing and re-selling your home. If you are not too far behind on your payments,and your credit is in good standing, then the bank or financial institution, may be willing to offer you a second mortgage.
Another alternative offering the chance to refinance your home is the Homeowner Affordability and Stability Plan or “HASP” . This is brand new program that has been put in place by the Obama administration. This is a plan designed to help those who don’t have enough equity built up. if you are paying over thirty one percent of your monthly gross income in housing costs, you may be eligible for a home refinancing or get other assistant to save your home and property.
Also in order to qualify for the HASP, your home must be financed by either Fanny Mae or Freddy Mac. If you are not sure who is financing your home, call your mortgage broker and they will be able to tell you.
Some other factors for eligibility for the HASP is
1.) You must be current on all of your payments and your loan balance must not be more than 105% of your current market value of your property.
2.) Your loan balance must not exceed 729,750.00 and it must be for a single family residence that is your prime residence.
3.) You must be able to prove that you are going through financial hardships in which your mortgage payments are over 31 % of your total income.
If you qualify for a HASP, then financial service providers will modify the loan to reduce the monthly payment to no more than thirty one percent of your gross monthly income.
These are just some of the basics to refinance while house is in foreclosure, for more detailed in formation you can visit www.financialstability.gov
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