125% Loan to Value calculation is here and could help you refinance your home.

This program is designed for those who wish to remain in their homes and still  take advantage of the current low interest rates.

If your home loan is held by Fannie Mae or Freddie Mac, and you are current on your mortgage payments, you maybe eligible to refinance your mortgage even if your LTV is up to 125%. For example, if your loan amount is $300,000 and the current value of your home is $240,000, your LTV is 300/240, or 125%.

Refinancing to a lower interest rate will usually result in a lower monthly payment. Alternatively, if you can afford your current monthly payment, you may consider using the savings to get “above water” faster.

The past 3 years have reinforced to all of us that home values are not guarenteed to rise. The value changes because  a fluctuating  market determines the price. However your loan amount will continue to go down as you make the payments. If you refinance into a shorter period loan you will pay less interest over the life of the loan and re establish equity quicker.