Certain lenders and programs allow you to refinance if you’ve had a late mortgage payment. But you may have to do some searching.
Question: Is there any way to refinance if we had a late payment on our mortgage six months ago? So far no one will approve us until a year has gone by with no late payments. We are drowning with a 6.75 percent interest rate.
Answer: First, you’ll need to determine what kind of loan you currently have. If your loan is owned by Fannie Mae or Freddie Mac, you may be eligible for HARP. HARP allows for one late payment in the last year, as long as it was at least 6 months ago.
An FHA streamline refinance is also a possibility, if your current loan is an FHA loan. An FHA streamline allows for one late payment in the last 12 months, as long it was more than three months ago.
If you current loan is a VA loan, you may be eligible for a VA streamline refinance. VA streamlines do allow for recent late payments.
Keep in mind that with all of these loan types, lenders can impose their own rules above and beyond what HARP, FHA, or VA require. That’s probably the reason your experiencing resistance from the lenders you are applying with. Keep looking, and you may find a lender that sticks to the base requirements and who may approve you for the loan.