Do you know Fannie?
Or Freddie for that matter! If you happen to have your mortgage financed through either Fannie Mae or Freddie Mac you may be eligible to refinance your home through a new housing stimulus plan supported by President Obama. This is a benefit that may help up to 9 million Americans so it may be worth your time to read more.
Let’s say you have been looking into mortgage refinancing, and you would like to try to refinance for a lower interest rate. It’s almost impossible to do that now, because many homes have decreased in value, making it harder for mortgage refinancing. But now- through the Home Affordable Refinance Program, Fannie Mae and Freddie Mac will approve mortgage refinancing for many homeowners. There are criteria that a homeowner must meet:
- You must reside in your home
- Your loan must be secured through Fannie Mae or Freddie Mac
- You must be current on your payments
- The amount left on the first mortgage is about the same or slightly less than the current value of your home.
- You can afford the new mortgage payments
- The new loan agreement offers improvements to the stability or affordability of your loan.
If you’re not sure that the new loan would really benefit you in the long run, you can get a “Good Faith Estimate” from your lender. This will give you all the information you need when you compare the information on the new loan with your current loan to decide if it is financially a good idea to pursue mortgage refinancing. It is also worth considering if you have an adjustable rate on your loan. While interest rates are low now for adjustable rate mortgages- it may pay off financially to lock in at a lower fixed rate to offer some protection against sky- rocketing rates sometime in the future.
It is important to know the current market value of your home. If you do owe more than what your home is worth right now, you will need to determine that percentage.
You may be eligible if the first mortgage does not exceed 105% of the current market value of the property. For example, if your property is worth 100,000, but you own 105,000 or less on your first mortgage, you may be eligible.
This can also be helpful if you have a second mortgage, also known as a home equity loan. The amount left on the first mortgage still must be less that 105% of the property value. There are other criteria that must be met worked out with your lender, and you must be able to meet the payment on the new loan.
How do I find out more about mortgage refinancing through Fannie Mae or Freddy Mac?
You can contact Fannie Mae or Freddie Mac through a toll free number or go to their websites for more information. There is an online submission process also to find out if your mortgage is owned by either agency. You can also call the lender where you have your mortgage for more information.
· For Fannie Mae
1-800-7FANNIE ( 8am to 8pm EST)
· For Freddie Mac
· 1-800-FREDDIE (8am to 8 pm EST)
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