Not everyone will qualify for to refinance their home despite recent initiatives in the Making Home Affordable plan recently rolled out by the Obama Administration. Unfortunately, one of the most attractive solutions for owners struggling with high payments will not be available for everyone under this plan.
Have a Jumbo Mortgage?
Typically jumbo mortgages, or non-conforming loans, were those with loan amounts over $417, 000 and do not qualify under the recent refinance plan. This doesn’t mean you can’t refi your jumbo loan at today’s rates, but the 105% loan value exception will not apply to you. If you’re unsure whether your loan is conforming or not, call your lender.
Behind on Payments?
Owners wishing to refinance cannot be in default. If you’re behind in payments you may want to contact your lender and look into the possibility of a Loan Modification.
Upside Down in Value?
The new initiative allows for refinancing up to 105% of your homes current value. If your value has dropped more than 5% over what you currently owe, you won’t qualify. As an example: Owner bought in 2006 for $400,000, put 10% down and has a principle balance of 380,000. Owner would like to refi at today’s lower rates, but value of the home is now only $350,000. The bank will only lend up to $367,500 (105% of 350,000 value).
Unemployed?
In order to refinance, you must demonstrate to the bank your ability to repay the loan. You will be required to document your income and assets. If you’ve recently become unemployed, you will not be able to refinance. You may have other options to keep the house such as loan modification or renting the property though, so be sure you contact a trusted advisor.
Colleen Fischesser, Washington State Designated Broker & Owner of RE/MAX Select R.E; Member NWMLS, SKAR, WAR, Voted "Best in Client Satisfaction" Seattle Magazine 2006,2007 & 2008. Representing home Buyers & Sellers for nearly two decades. 
