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Past due payments are endemic across the US

If you have past due payments on an existing mortgage, you are not alone. Past due status on housing mortgages has become alarmingly widespread across the country. In recent years, Ohio, Maryland and Massachusetts have even gone so far as to mandate state subsidized assistance programs for people in danger of foreclosure. New York is the most recent state to acknowledge the out-of-control fallout emanating from the recent breakdown of the 1990s housing boom. The state announced plans earlier this July to implement its "Keep the Dream" program. In conjunction with the Federal National Mortgage Association, the third most populous state in the union plans to refinance up to $100 million in mortgages, assisting several hundreds of homeowners across the state.

If you have sub-prime credit, you may qualify for local assistance

Mortgage experts across the country estimate that by 2009, due to higher interest rates imposed to penalize past due payments, the adjustable rate of American mortgages reset to the astonishing tune of an $800 billion increase nationally. If you're an American home owner with past due payments who needs to refinance a mortgage, there's never been a better time to have a zip code in NY, OH, MA or MD! You may qualify for state subsidized assistance and should inquire about it with your lender or state mortgage association.

What are my refinancing options with sub-prime lenders?

For those of us who don't qualify or simply don't live in states that offer subsidized assistance, there are still options available for home owners with past due payments who need to refinance their mortgage. If you are 30 days, 60 days and in some cases even 90 days late on an unpaid mortgage payment, you can still find a sub-prime lender willing to refinance your home and help you get back on track financially.

Typically, these lenders will charge higher interest rates depending on your equity and credit history. The more late payments you have on your mortgage history, the higher your refinanced interest rates will be. Because lenders typically evaluate your mortgage history based on the past 12 months, ask yourself if you are able to pay your past due balance off as soon as possible and make timely payments for the next twelve months. If you can do this, try waiting a year since you will get significantly better interest rates.

If you fall 120 days behind in your payments a permanent mark is placed on your mortgage history making it virtually impossible to refinance in the future. (Assuming, of course, that your lender does not foreclose after 90 days past due) If you cannot qualify for a conforming or sub-prime mortgage, your final option is to consider applying for a hard money loan. You may have a better chance of approval.

National Rate Averages

Mortgage Rates

Product Rate
5/1 yr ARM 3.147%
1 yr ARM 3.299%
15 yr fixed 3.221%
30 yr fixed 3.815%

Home Equity Rates

* Updated Jun 8, 2012