Refinance Your Home With $0 Down

One of the results of the housing and mortgage crisis is the tightening of lending

and credit standards, including practices requiring higher and higher down payments for both new mortgages and refinance packages. If you would like to take advantage of the low mortgage refinancing interest rates currently available, but you dont have any cash, dont give up. There are ways that you can refinance your home with zero money down. Lets take a look at the options:

1. HAMP: The government has a broad program in place called the Home Affordable Modification Program (HAMP). This program operates based on the premise that no homeowner should pay more than 31 percent of his take home income toward mortgage payments. Under the HAMP program, your current lender will modify your mortgage (based on your appropriate application) to make this happen. HAMP refinancing can include: reusing your interest rate, extending your loan term (up to 30 years), or reducing your principle.

2. CASH-OUT REFINANCING: If you have more than 20% home equity, then you may want to look at cash out refinancing. In a cash out loan modification, you take out a loan in a higher amount than your current principal, pay off your existing loan, and pocket the difference. Your fees and closing costs are usually tacked onto the end of your loan. With cash out, you can not only secure a better interest rate, but you can also take the cash to help with other expenses.

3. HOME EQUITY: If your home equity is greater than 50%, consider taking out a home equity loan (HEL) to pay off your existing home loan. You can usually get a preferred interest rate and fees that are only a few hundred dollars. Shop carefully HEL interest rates vary considerably between lenders, and HELs offer much less flexible terms than traditional home loans.

4. AFFORDABLE ADVANTAGE: Have you heard of Affordable Advantage? Its a new government program. This federal program is only offered so far in Massachusetts, Wisconsin, Idaho, and Minnesota. If you live in Pennsylvania, California, and Colorado, check out similar state run programs. Affordable Advantage offers new home loans and refinancing packages offered through Fannie Mae. If you live in a state that offers AA, check with your lender to see if you qualify.

In times like these, get creative and ask questions you never know what programs or packages are available to someone in your circumstances until you ask!

by: Ashlee Pannell

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