Across Arizona, many people are trying to refinance but are finding out that they can’t because they owe more than their home is worth on their mortgage. Although there are a few programs like the Obama 105/125% refinance, many people still don’t qualify for those and the FHA streamline and VA streamline programs are about to change the rules so it is only going to get tougher.

But if you are in this situation, you can still get creative and save a few bucks on your mortgage payment.

Your mortgage payment is made up of PITI – or Principal, Interest, Taxes and Insurance.  If you are in a situation where you can’t refinance, that means that reducing your Principal and Interest are “out” for now — but what about Taxes and Insurance?

It is time to get focused on saving money on taxes and insurance.

Taxes – Your taxes are set by the government for the community you live in. This number is easily found at the Maricopa County Assessors office and can also be disputed if you think the assessed value of your home is too high.

Insurance – Not only should you shop around for cheap insurance quotes from companies that you know and trust, but there are also several things that you can do to save money on your home insurance like getting a discount for having your home and auto insurance on one policy or putting in one of the best home alarm systems that you can find.

You might be surprised to learn just how much you can save just by shopping around a little bit.

Even though you are currently in a situation where you cannot refinance and save money on your principal and interest, don’t let it deter you from trying to save money on your overall mortgage payment each month — which is really your ultimate goal.

Especially in these tough times.

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Many people in who are current on their mortgage payments and want to refinance their home have spoken with their lender about the Obama refinance — where they can be up to 105% “under water” and still get a Fannie Mae / Freddie Mac loan.

What they are finding out once their appraisal comes back is that they are actually “under water” by more than 105% — and now they are trying to decide what to do.  Should they just keep making payments at their high interest rate? Should they stop making payments and try to get a loan modification? Should they try for a loan modification even though they are current?

All of these are good questions – and really, there is no easy answer. There for sure is not an answer that will fit everyone’s situation perfectly — each situation is different and individual.

But…

There is a possibility — note the word possibility — that the guidelines on the Obama refinance will soon be expanded where you can be up to 125% upside down on your home and qualify for the Obama refinance.

It hasn’t been made official yet — but for many people who currently have been turned down by their lender and are trying to decide whether to:

1. Just keep making their mortgage payments as normal
2. Stop making payments and try to get a loan modification
3. Try for a loan modification even though they are current

Now there is at least one more option on the table — wait and see if the Obama refinance guidelines get expanded.

According to Bloomberg:

Fannie Mae and Freddie Mac may get permission to begin refinancing mortgages with loan-to-value ratios above 105 percent as the Obama administration seeks to boost participation in its anti-foreclosure programs.

“We’re actively considering how to structure a program that makes sense over 105 percent,” Federal Housing Finance Agency Director James Lockhart said yesterday. He said a ratio of 125 percent “is a number” that’s on the table, though “not necessarily the number we’re going to end up with.”

Related Posts

• Obama Expands Refinance Program From 105% To 125%