Underwater mortgage? Here's your chance to refinance

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Underwater mortgage? Here's your chance to refinance

CREATED May 16, 2012

Reporter: Craig Smith

TUCSON (KGUN9-TV) - If you're struggling with high mortgage payments you may be in for some help.
Lenders, and the Federal government are offering easy refinancing---so easy the lenders may contact you and offer you a deal.

In this case we need to revise a common piece of consumer advice.  You often hear if someone comes to you---with a deal too good to be true, it probably is.
Now, lenders are coming forward to offer a lot of homeowners a chance to refinance at much lower rates.  It's a real, legitimate deal and it could save you thousands of dollars a year.

If you have a mortgage, it's probably stuck at an interest rate much higher than current rates, on a mortgage that's much more than the home is worth.
But a lot of homeowners should be able to refinance at much lower rates through a program called HARP---for Home Affordable Refinance Program.
It was too tough for most homeowners to qualify for an earlier version of HARP, but HARP 2 has lots of changes to help more people get out from under high interest loans.

Mark Tronziger of Fairway Mortgage says, "If you qualify for this program, it doesn't matter how upside down you may be in your house, you have the ability to refinance and take advantage of lower rates."
Tronziger says lenders may contact you, you may contact the lender, or you may be able to refinance through a different lender but there are some important conditions.
The mortgage must be owned by the government affiliated finance agencies nicknamed Fannie Mae or Freddie Mac, though another lender may be handling your mortgage paperwork.
You do have to have acceptable credit and your existing loan must have been approved by Fannie Mae or Freddie Mac before May 31, 2009.

Tronziger says, "Maybe you need an appraisal, although under the HARP 2.0 program one of the benefits is that probably 80 percent of all mortgages coming through are getting appraisal waivers so you don't have to go through the expense and time of having an appraisal done."

KGUN9 Reporter Craig Smith asked Tronziger: "The customer might be pretty skeptical and say, what's in it for the bank if the bank is willing to cut me this kind of deal?"
Tronziger says it's about the economy as a whole.

"In order to get this housing market moving again which is pivotal to an overall rebound in our economy, we have to try to figure out how we keep homeowners in their homes instead of the alternative which is walking away in a foreclosure or a short sale."

Tronziger says different lenders may add a little to raise the interest rate above the rock bottom available but you are still looking at saving hundreds of dollars a month, thousands a year---and much, much more over the life of the loan.