Q: I applied for a refinance with my current bank and the appraisal on my property came back lower than what I owed, therefore, I was rejected. My mortgage payments are never late and always made on due date. Under the HARP program, would I be eligible for a refinance, considering my payments are on time and the property value is lower than the mortgage? Is there any program available for my situation?
A: The recently announced enhancements to HARP open the opportunity to refinance to more homeowners that owe more than their property would appraise for. It is not available for all loans, but your current lender should easily be able to determine if your loan is HARP eligible today under the enhanced program. There should not be any cost for them to check.
If your loan is not HARP eligible, you may need to consider paying down your loan to refinance. FHA loans allow borrowers to have as little as 3.5% equity in the property.