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Home Affordable Refinance - What is it all about?

Posted on: 08th May, 2009 02:28 am
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...
Hi Ema,

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.

In order to know about the fees associated with Home Affordable Refinance Program and the documentation required for it, check out the given page:
http://www.mortgagefit.com/blog/homeaffordable-refinance/

Take Care.
Posted on: 08th May, 2009 02:41 am
Hi Ema

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.
Posted on: 08th May, 2009 02:58 am
Hi Ema,

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.
Posted on: 08th May, 2009 10:29 pm
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.
Posted on: 09th May, 2009 01:20 am
Hi

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:

http://loanlookup.fanniemae.com/loanlookup/ (Fannie Mae)

https://ww3.freddiemac.com/corporate/ (Freddie Mac)

Hope this helps...
Posted on: 09th May, 2009 03:44 am
Hi,

The home affordable refinance is a great program but unfortunately does not extend for good citizens like me who does not have a fanni mae or freddie mac loan. I have been my mortgages on time but am unable to refinance unless I shell out the difference between my current loan balance and the new appraised value (which has gone down in the last year). I have shopped around and can't find anything good.
Posted on: 18th Jan, 2010 08:53 pm
Hi Matt,

Your query has been answered in the given page:
http://www.mortgagefit.com/inprocess/about33405.html#145062

Please take a look at it. I hope it'll help you.

Take care.
Posted on: 19th Jan, 2010 01:25 am
Hi,
I am in the process of refinancing my home for the fist time. I bought it May 2008 for 222,000 with a 6.25% APR, and currently owe $206,500, the value of the house is now 170,000, per my lender. I started the application process and my current lender offers us a 5.625% APR, saving of $106/mo with a break-even point of 24 mo. They offered me to roll over the closing costs to the loan and just paid up front the application fee of $542. Is it better to pay the closing costs up front or to roll them into the loan? What is a point? how would I benefit more when doing my income taxes in 2010?

Thank you
Posted on: 20th Feb, 2010 08:36 pm
Welcome Blanca,

If you roll over your closing costs in the loan, then you would get higher interest rate to pay off the loan. It is better to pay the closing cost upfront.

To know about points, check out the given page:
http://www.mortgagefit.com/know-how/points.html
Posted on: 21st Feb, 2010 11:05 pm
Recently, it has been announced that HARP's new end date is June 30, 2011. Extending the end date is a great news as it would help some more underwater borrowers to save their property by taking help of this program.
Posted on: 24th Mar, 2010 03:59 am
ONLY IF YOUR MORTGAGE IS FANNIE or FREDDIE. If not, you're at the mercy once again of whoever your lender is and some aren't working with people. Why don' they EVER get the obvious that if a payment is lowered people can still pay them??!!! A friend of mine just received notice she was turned down, and it may lead to this person ending it all (I'm NOT kidding). They were recently qualified for social security and DUH that is guaranteed income but NO, they won't work with her because she doesn't make enough money. I'm sorry didn't WE PAY THEM TARP $ because they mismanaged THEIR money? WHY ARE THEY EVEN STILL IN CHARGE OF THE MORTGAGES PERIOD? And why is NO ONE enforcing this stuff? Let us miss a payment or make an error - that sure gets enforced quick! Thanks for letting me vent and I just hope I don't lose a friend over this - literally.
Posted on: 19th May, 2010 03:19 pm
i am so with you on this and cannot beleive more people are not up in arms about this--i hope your freind is o.k.
Posted on: 31st Aug, 2010 06:25 pm
our bank told us that we qualify for home affrodable refinance and here is the deal- from interest rate of 5.75% it lowered to 4.625% fix for 30 yrs with a closing costs of $2900 to be added to the new loan. it would lower our mortgage to about $300/month but our loss would be the 2 yrs that we paid mortgage since it will start back to yr 1 of the 30 yrs.
Posted on: 02nd Nov, 2010 07:28 am
Hi gen,

If you are unable to pay the mortgage as per your present payment plan, then you should go ahead with home affordable refinance option as given to you by the lender. If you are planning to stay in the property for the next few years, then you'll be able to offset the closing cost that you pay at the time of closing.

Thanks
Posted on: 02nd Nov, 2010 11:55 pm
I'd say your lender is giving you decent advice. Just because you have a
30 year fixed mortgage doesn't mean that it needs to take you 30 years to pay it off. there is always the option of refinancing later on or making additional luimp sum payments. For now your focus should be on keeping things as affordable as possible so you can keep up your payments and build up your credit score - worry about payment efficiency when your income has picked up enough that you can comfortably make higher repayments.
Posted on: 24th Oct, 2011 05:58 pm
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