We really do need a larger home, but while our mortgage is current, the balance is more than we could sell for. Will the government's foreclosure pact offer us any help? Maybe. What you will be looking for is a principal reduction. To qualify for one, however, borrowers have to be behind on their payments or at "imminent risk" of default, which you might be. Most principle reductions are expected to go to borrowers whose loans are owned by one of the five big banks, which are Ally Financial, GMAC Mortgage, Bank of America, JP Morgan Chase and Wells Fargo (but the government hopes to make a similar deal with nine other banks). Some borrowers whose loans were packaged into securities may qualify. The settlement calls for principal reductions on both first and second mortgages but doesn't cover loans owned or backed by government-backed Fannie Mae or Freddie Mac. Borrowers will get letters from their mortgage companies to advise them if they qualify for help. But government officials are encouraging borrowers to contact their mortgage company to see if they qualify. There is also a national clearinghouse site with more information: nationalmortgagesettlement.com. Refinance program If you decide to refinance your present home, the refinance program applies only to loans owned by the referenced banks. Borrowers have to be current on their loan payments and owe more than their home is worth. The interest rate can be reduced to as low as 5.25 percent. In your case, the resulting loan payment could be low enough that you could rent out your present home and go on to buy a larger one. Foreclosures. This does not apply to you, but those foreclosed on between 2008 and 2011 are eligible for a cash payment of between $1,500 and $2,000. They will receive a form in the mail. They don't have to prove they shouldn't have been foreclosed.