It's time to refinance ~ but is your home worth enough to get that great low rate?

refinanceShort sales, Bailouts, Mortgage Reductions…there are all kinds of programs being talked about, proposed or waiting for approval all in hopes of helping the ailing housing market.  But I have a question.  What about the homeowner who has never missed a payment, has a great credit score and a solid employment history?  Is there a pat on the back for this person?

I’m talking about trying to refinance a home.  Trying to get that low interest rate everyone is talking about.  You’d think it would be simple with a history of a lifetime of great credit, right?  Nope.  Not if your home has fallen to below the value you would need to obtain that financing.  The interest rates have fallen, but so have property values and that’s going to prohibit many from cashing in on the lower rates.  Wouldn’t it be nice if a lender would say “You’ve demonstrated that we can trust you with this mortgage, so even though your home has fallen in value due to recent market conditions, we will be happy to refinance your home at the new low interest rate.  This will give you an extra $400 a month that you’ll likely put back into the economy.”  Doesn’t this make sense?

How ’bout some sort of sliding scale.  Say…you’ve never been late on a payment in your life…bonus…you get a lower interest rate.  You have a credit score over 800?  Awesome…we’ll give you a loan for up to 100% of the value of your home and NOT charge you mortgage insurance.  (I mean, why should you pay mortgage insurance? You’ve already demonstrated you’re a good credit risk!)  And even though your home’s value has fallen, if you have great credit and a job and want to refinance?  No problemo.  Come on, this is simple logic…why isn’t anyone proposing this?

Did you know that if you have your home listed for sale…you can’t refinance.  Ok, maybe I understand that.  But, did you also know that you cannot refinance until 6 months AFTER you’ve taken your home off the market?  Doesn’t matter that you’ve never missed a payment.  You, Mr. or Ms. Homeowner are all the same.  One size fits all. 

Don’t get me wrong…my heart breaks for those who are losing their home due to bad mortgage programs, a poor economy and other life circumstances…hard working people who are caught in a bad situation.  But why isn’t someone spending just a little time trying to help homeowners who simply want to refinance in order to lower their monthly mortgage payment.   Homeowners who are just trying to stay afloat so they don’t become the next foreclosure.

But I think to myself…what a wonderful world it would be…


  1. I agree this is great problem to overcome. People could get relief if their home appraises. I think most that need the help are having this problem of under appraising. I think the government should work with banks to get a refinance with the existing bank which already has the risk to be able to side step the appraisal.

  2. That’s a great idea. Let’s hope someone lawmaker out there with more than 2 brain cells to rub together picks up on this issue and makes changes to resolve it!

  3. Jeremy says:

    I am this type of person. I have never missed a payment in my LIFE, but because my home value has dropped I am unable to refinance my mortgage and save over $300 a month which I could use elsewhere 🙁

  4. Hey Jeremy,
    Ironically…so am I. No pat on the head for me for paying all my bills. Frustrating and truly not fair.