Where Should Homeowners Go to Refi Now?

UPDATE:  The Home Affordable Program has changed quite a bit over this past year.  Please contact me if you're interested in reviewing your scenario on your home located in Washington State.

More details to President Obama's Making Home Affordable Refinance and Modification Options that was unveiled yesterday.  Fannie Mae issued an announcement that they will be able to purchase refinances under this plan on April 1, 2009.  This means that lenders will be able to start originating these loans now.   Homeowners with mortgages who are interested in refinancing or a loan modification fall into a couple different categories.

If you have equity in your home and you qualify for a refinance, you do not need this program.  The Making Home Affordable Refinance does not allow cash-out–this would be a standard refinance which is still available.

You may be eligible for a Making Home Affordable Refinance if:

  • You own and live in your home (which may be 1-4 units).
  • The amount you owe on your mortgage is close to the current value of your  home (80.01-105% loan to value).
  • You have stable income.
  • Your current mortgage is owned by Fannie Mae or Freddie Mac. If your home is not owned by Fannie Mae or Freddie Mac, you may qualify for a FHA refinance as long as your loan to value does not exceed 95%.
  • Your current mortgage balance(s) is below $567,500 (in King, Pierce and Snohomish Counties).  For other conventional loan limits, click here.
  • You are current on your mortgage payment (if you are not current, you're a candidate for the loan modification program**).

If you meet the above conditions for a refinance or Making Home Affordable Refinance, contact your local mortgage professional. Details about how the home affordable refinances will be priced have not yet been announced.  Currently Fannie and Freddie have price hits based on loan to value and credit scores.

If your home is located in Washington State, I'm happy to help you with any type of residential mortgage. You can begin the process by completing a loan application which I have on line under my photo (to the left) under favorite links.  Be prepared to provide the following:

  • Most recent paystub.
  • Your most recent W-2 and possibly your last complete tax return.
  • Details about your current mortgages including any second mortgage or HELOC.

Refinances are most likely taking longer than the last time you obtained a mortgage due to the volume of business during a time when every aspect of the mortgage and real estate industry has fewer people employed.  Please be patient.

With home values depreciating in most areas, I do not recommend delaying your refinance.  The higher your loan to value (mortgage balance divided by home value), the more challenging the transaction will be.

**If you own a home and are having a difficult time making your mortgage payment because you have less income or your payment has increased and if you do not qualify for a refinance; you're probably in the loan modification camp.  Start today with contacting who you make your mortgage payments to (the loan servicer).  You can also call HOPE NOW at 1-888-995-HOPE (4673).  You do not need to pay someone (a loan mod "specialist") to assist with modifying your mortgage.

Loan modifications are available through the Making Home Affordable Modification program if you are at risk of "imminent default" or currently delinquent on your mortgage payment.  Your servicer may or may not decide to modify your mortgage–there are no guarantees but you must take action now.   Click here for more information about the Making Home Affordable Modification.  

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