Home values have been rising and many borrowers are using the equity that's helped to give them to take money out of their homes with cash-out refinances. But they're choosing to take out much less than they could. People seem to have learned how drastically home values can drop and erase their equity and then some, and they don't want to be stuck in that situation ever again.
If you need help with your mortgage, there are government programs out there that may help you. But when it's all new to you, the programs can sound like an alphabet soup of acronyms that confuse and frustrate. For example, you may be able to use HARP or MHAs HAMP, but your RMA is likely to be denied if you DIY. All those letters leave me SMH (shaking my head), but before you LOL, get the 411 on one more.
HAFA, the Home Affordable Foreclosure Alternatives program, is meant to help borrowers who are not able to keep their home with a HAMP (Home Affordable Modification Program) or other modification. Mortgage loan modifications are a great option for borrowers who have the income to afford their home with a reduced payment.
You've probably heard that the Federal Reserve Bank announced plans to raise interest rates in December 2015 for the first time in nearly a decade. But that doesn't mean mortgage interest rates will be high anytime in the near future. Not by any stretch of the imagination.
The two words that have most commonly, and most appropriately, been used to describe mortgage rates in recent years are historically low. How low is historically low? They're currently at about 4%. The lowest they've ever been is about 3%, and they couldn't realistically go much lower. So, yes, very low.
So your mortgage payment has become more expensive than you would like it to be, and the house isn't worth what it used to be.
What are your options to improve things?
It depends on the specifics of your situation and what your goals are. If you want to keep your home, you can try to get the monthly payment lowered to a more affordable level. There are a couple ways to do that. Two of the most common are refinancing and loan modification. But which is right for your situation?