Even though Nevada’s home sales are up, many homeowners are still underwater in their mortgage loans. Underwater mortgage simply means that a homeowner owes more on their mortgage than their home is actually worth in the current market. In 2013 the underwater mortgages were higher than 2014, but Nevada is still in lead for the entire nation this year so far with the average loan equalizing at 79.4 percent of the value of the home. Las Vegas accounts for almost 41 percent of that.
One of the main downfalls of owing more on a mortgage than the home is worth is that refinancing is more than likely out of the question for most of these homeowners. Some owners are still able to successfully refinance using the Home Affordable Refinance Program (HARP) program version 2.0 in 2014, but there are guidelines to being able to do so. HARP is one of the only programs available for homeowners who are underwater. This program will allow these owners to refinance into a lower interest rate as long as they have been current on their mortgage payments for at least 12 months prior to application. Another requirement to be accepted for HARP is that the mortgage loan is owned or guaranteed by either Freddie Mac or Fannie Mae. These corporations are controlled by the government and only buy or sell home in the secondary market or better known as ‘national exchanges’. There are other requirements and guidelines for refinancing through HARP so researching qualifications is necessary.
If accepted, refinancing to a lower interest can help underwater homeowners save money in the long run by reducing the amount of their mortgage payments.