More help with refinancing on the way?

This post comes from Angela Colley at partner site Money Talks News.

It's now possible to find mortgage rates lower than 3.5% for a 30-year, fixed-rate mortgage. If your current rate is significantly higher, you could be thousands of dollars richer by refinancing. That is, if you can refinance.

Many homeowners would love to refinance, but credit is tight, and so is equity. Government programs are in place to help borrowers with certain types of mortgages in certain situations, but if you don't meet the narrow criteria, you're out of luck.

President Barack Obama has proposed a plan to allow homeowners to refinance regardless of their mortgage type -- even if they're underwater on their loan. Stacy Johnson recently interviewed HUD Secretary Shaun Donovan to ask about the plan. Check out the video below, then read on for more information about refinancing programs already available.

If approved, the new plan will help all homeowners. It would allow refinancing on any type of loan -- even if you're underwater on your mortgage -- provided you meet a few requirements. According to the White House, homeowners would save $3,000 a year on average.

The eligibility requirements listed on the White House Blog:

• No missed mortgage payments in the last six months, and no more than one missed payment in the six months before that.
• A current FICO score of at least 580 (approximately nine in 10 borrowers meet this requirement).
• The loan being refinanced is not worth more than area median home values, as determined by FHA-conforming loan limits.
• The loan being refinanced is for a single-family, owner-occupied principal residence (to be sure the program benefits responsible homeowners trying to stay in their homes).

The plan also calls for a more streamlined refinancing process. Homeowners would have a simplified application process, easier requirements and no appraisal costs.

To that end, the Expanding Refinancing Opportunities Act sponsored by U.S. Sen. Dianne Feinstein, D-Calif., would extend streamlined refinancing to families whose loans are not guaranteed by the government.

Congressional approval is tough to come by with today's partisan politics, so hapless homeowners will have to hope for the best. But if you need help now, there are several refinancing programs already available:

The Home Affordable Refinance Program (HARP)

HARP helps underwater homeowners with mortgages backed by Fannie Mae and Freddie Mac refinance into a lower-rate mortgage. The program was revamped in late 2011 to help more people. To be eligible for HARP:

• Freddie Mac or Fannie Mae must own or guarantee the mortgage, and it must have been sold to them on or before May 31, 2009.
• Your loan-to-value ratio must be greater than 80%.
• You must be current on your mortgage with a good payment history in the last year
• The mortgage can't have already been refinanced via a HARP program. One exception: if it's a Fannie Mae loan refinanced between March and May of 2009.

To learn more, see "More help for homeowners: HARP 2.0."

Home Affordable Modification Program (HAMP)

If you have a government-backed loan, but you're behind on your mortgage payments, you may qualify for HAMP. While not a traditional refinancing program, HAMP readjusts your mortgage payments to a lower (and more affordable) rate. You may qualify for HAMP if:

• You have a mortgage backed by Fannie Mae, Freddie Mac or a mortgage lender registered with the U.S. Treasury.
• You received your mortgage on or before Jan. 1, 2009.
• You owe less than $729,750.
• You have a financial hardship and are either currently delinquent on your mortgage payments or at risk of becoming delinquent.
• You have a job and proof of income.
• You haven't been convicted of a felony related to finance or real estate in the last 10 years.

If you don't have a government-backed loan, you may qualify for a refinancing program that will lower your monthly payments. According to the Making Home Affordable site, the FHA Short Refinance program allows conventional mortgage holders to refinance to an FHA loan. Lenders must reduce the amount they owe to no more than 97.75% of the home's value. You may qualify for the program if:

• You have a mortgage that is not backed by the FHA, Fannie Mae, Freddie Mac, the VA or the USDA.
• You are underwater on your mortgage.
• You are current on your mortgage payments.
• You meet standard FHA underwriting requirements.
• Your debt is less than 55% of your monthly income.
• You haven't been convicted of a financial or real-estate-related felony in the last 10 years.

While many lenders won't refinance an underwater mortgage -- lenders typically require some equity in the home -- the current housing market has made some lenders more flexible. If you're at risk of foreclosure, your lender may be willing to refinance your loan or give you another alternative so you can avoid losing your home.

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The types of programs available (and the requirements) vary by lender. The first step to refinancing your mortgage is to talk with a housing counselor. HUD provides housing counseling services for free. A housing counselor can help you determine your options, gather the paperwork you need and create a budget to stay on track with your mortgage payments.

Where to find free help

If all these programs and restrictions have your eyes glazing over, not to worry. No matter where you live or what your situtation, you can get free housing help. To find a housing counselor, use HUD's Foreclosure Avoidance Counseling map or call (888) 995-HOPE, a toll-free service that's available 24 hours a day.

More from Money Talks News and MSN Money:

• Why house hunters shouldn't watch HGTV's 'House Hunters'
• 3 good ideas for paying off your mortgage faster -- and 1 bad one
• 5 tips to make sure your mortgage loan gets approved
• Calculator: Should I refinance?
• Should you buy a foreclosure?
• How much house can you afford?