Q: I have been trying to refinance my loan since February. We paid the fees asked of us and were told we qualified for the 105 percent mortgage refinance.

But now, 5 months later, the value of our property has dropped again. We were told we no longer qualify for a loan. But, isn’t there a program that allows you to refinance if your loan is up to 125 percent of the value of the property? We would definitely qualify for that but we were told it was only being talked about nothing in the works yet.

A: The rules have changed so many times since February, and are still changing. The good news for you is that the 125 percent home loan-to-value ratio for refinancing is in effect for those whose loans are securitized by Fannie Mae or Freddie Mac. The mortgage interest rate you pay shouldn’t be any higher than it would be at the 105 percent home loan-to-value ratio.

You can find out more at MakingHomeAffordable.gov. This plan was initiated by the administration under the Making Home Affordable plan to assist people in your situation. The Making Home Affordable plan, also known as HASP is there to assist homeowners whose home values have dropped but who nonetheless can benefit from lower interest rates.

Traditionally, a lender might only want to lend or refinance up to 80 percent of a home’s value. This requirement freezes out thousands of homeowners who have seen the value of their home drop precipitously during this recent housing market meltdown.

The Making Home Affordable plan allows lenders to refinance those loans even when the value of those loans reaches 125 percent of the home’s current value. There are other restrictions to the plan. You can get more details at MakingHomeAffordable.gov.

After educating yourself on your options, you should call your lender back to discuss your situation. My advice to you is to not only call once, but twice, or daily until you get someone to help you out.

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