Understand what it means to be underwater on your mortgage and learn practical strategies to address the situation.
In some cases, you can refinance an underwater mortgage. Explore your options today.
Homeowners who are underwater, owing more than their house is worth, still have some options for refinancing their mortgage.
An underwater mortgage is a home purchase loan with a higher principal than the free-market value of the home. The borrower may have no equity or negative equity.
A mortgage refinance involves replacing your existing home loan with a new mortgage for the same property. The funds from your new mortgage are used to pay off your existing loan, and you start making mortgage payments on the new one instead. There are many reasons to refinance your mortgage loan. You may want to reduce your interest rate, lower your monthly mortgage payment, avoid paying mortgage insurance premiums, or borrow from the equity you’ve built up in your real estate. Here’s when ...
If you’re looking for more affordable mortgage payments, refinancing and loan modification may be on your radar. Learn more about refinancing vs. loan modification.
Homeowners can wind up with an underwater mortgage when home values drop and the amount of their mortgage is higher than their home’s current value.
Key Takeaways ; You can expect to pay 2% to 6% of the loan amount in closing costs to refinance a mortgage. ; Certain types of government-backed loans have streamlined refinance options with lower out-of-pocket costs. ; No-closing-cost refinancing is available, but fees or higher rates will likely be rolled into your loan.
A cash-out refinance is a mortgage refinancing option that lets you convert home equity into cash. Use it with care.
An underwater asset is worth less than its notional value, like a home worth less than its outstanding mortgage. The term is also referred to as "upside-down" or "out-of-the-money."