Posted: Fri May 08, 2009 2:28 am Post subject: Home Affordable Refinance - What is it all about?
Hi there…I am upside down on my mortgage and have heard that the Obama government has come up with something called the Home Affordable Refinance. Can you explain to me what it is? I would like to know what it's eligibility criteria is. Also do we have to pay some kind of fees for it?...Thanks for help in advance... _________________ Need help choosing the right loan? Get free consultation from community lenders/consultant
The Home Affordable refinance Program is designed to help those homeowners who are upside down on their mortgage. This program gives them a chance to refinance their mortgage so that they would get lower interest rates or convert their arm into fixed rate mortgage.
Some of the important features of Home Affordable Refinance Program are:
Your loan should be owned or guaranteed by Fannie Mae or Freddie Mac.
Detached houses, condominium, duplex, triplex and four unit residential properties qualify for this program.
The mortgage balance should not exceed 125% of the current market value of your property.
Second loan, if any, will remain subordinate to the new first mortgage.
If you have a PMI on your existing mortgage, you will have to continue that insurance on the new mortgage.
Apart from what Sara had said, I would like to add that you will not be allowed to take out cash to pay off other debts or a second loan, if any. Apart from this, as a borrower, you should have sufficient income to afford the payments for the new loan. Your lender will also go for your employment verification. You should also note that in certain cases, vacation home/second home as well as investment properties may be eligible for this refinance program.
Thanks. _________________ Good is the Enemy of Great.
The new Home Affordable Refinance Program is a great relief to the thousands of home owners like you who are unable to refinance because their houses are upside down. Some of its key features have already been discussed by Sara and Niicss. I'd just like to add a few more points to that. To qualify for the program, one has to be current on the loan payments for the past 12 months. There should not be any payment more than 30 days late and any missed payments should also not be there on your credit report for the last 1 year. Thus, it is important not to fall behind on your loan payments, if you want to keep your chances of qualifying for the program alive. However, delinquency alone does not automatically disqualify one for the program. When applying for the refinance program, you should also keep in mind that the existing balance of the loan under this program will not be reduced.
Apart from what others have, I would like to add that as a borrower, you can apply for this program through any lender that has been approved by Fannie Mae and authorized to offer this program. The borrower can finance closing costs or take out cash up to 2% of the loan amount or $2000 whichever is less. Also, the new loan may be an fixed rate mortgage or an ARM with an initial fixed rate period of 5 years. _________________ Procrastination is the enemy of your financial sucess
This is a very good discussion on Home Affordable Refinance Program. I often see queries from a lot of people in this forum pertaining to this new refinance plan and whether they qualify for the program. The information given here will no doubt answer most of those queries.
This refinance program is applicable only to those loans that are owned or guranteed by Fannie Mae or Freddie Mac and many borrowers do not know if their loan is owned by either Fannie Mae or Freddie Mac. To know if your loan is backed by any of these two agencies, you can call your lender or Fannie Mae or Freddie Mac. Alternatively, you can also visit the following links and fill out the short forms to get the answer to your query:
sara
