MORTGAGE REFINANCING WILL BE AVAILABLE FOR MORE PEOPLE WITH MORTGAGES UNDERWATER

By
Real Estate Mortgage Broker with SOUTHERN ARIZONA COMMUNITY BANK

UNDER THE GOVERNMENT'S MAKING HOMES AFFORDABLE PROGRAM, BORROWERS WHO HAVE A MORTGAGE THAT IS MORE THAN 80% OF THE CURRENT VALUE OF THE HOUSE MAY BE ABLE TO REFINANCE WITH NO MORTGAGE INSURANCE AND A LOWER INTEREST RATE. FOR EXAMPLE, I RECENTLY REFINANCED SOMEONE WITH A LOAN TO VALUE OF 104% AT A 5.5% INTEREST RATE (THEIR PREVIOUS RATE WAS 6.375%), LOWERING THEIR MONTHLY MORTGAGE PAYMENT OVER $200 A MONTH. BORROWERS CAN NOT TAKE OUT MORE MONEY. THE INTENTION IS A GOOD BORROWER CAN REDUCE THEIR MONTHLY MORTGAGE PAYMENT, SAVE MONEY AND HOPEFULLY GENERATE MORE SAVINGS OR DISPOSABLE INCOME TO SPEND AND HELP THE ECONOMY. AT THIS TIME, FOR A MORTGAGE BROKER OR BANKER TO REFINANCE A BORROWER, THEIR MORTGAGE MUST BE OWNED BY FANNIE MAE.  BORROWERS CAN EITHER ASK THEIR SERVICER (SERVICERS ARE NOT NECESSARILY THE OWNER OF THE MORTGAGE) OR GO TO WWW.FANNIEMAE.COM TO CONFIRM IF IT IS OWNED BY FANNIE MAE. IF IT IS OWNED BY FREDDIE MAC, THEN THE EXISTING SERVICER WILL NEED TO REFINANCE THE LOAN. AT THIS MOMENT, BOTH PROGRAMS GO TO 105% OF THE CURRENT APPRAISED VALUE OF THE HOME.   STARTING SEPTEMBER 1ST, LOANS CAN BE REFINANCED UP TO 125% OF THE CURRENT APPRAISED VALUE. BUT, ONLY THE CURRENT SERVICER CAN DO THE REFINANCE BEYOND 105%. 

UNDER THE CURRENT PROGRAM, RATES ARE HIGHER FOR A HIGHER LOAN TO VALUE. FOR PEOPLE WITH LOAN TO VALUES BETWEEN 105%-125%, IF THEY GET A MORTGAGE TERM LESS THAN 30 YEARS, THE INTEREST RATE WILL BE A LITTLE LOWER.  THE GOVERNMENT IS TRYING TO HELP PEOPLE REBUILD THEIR EQUITY. ALL LOANS ARE SUBJECT TO CREDIT APPROVAL. AND RATES DO CHANGE ON A DAILY AND SOMETIMES MORE OFTEN BASIS.

THE MORE PEOPLE WHO STAY IN THEIR HOMES AT THIS MOMENT, THE BETTER IT IS FOR EVERYONE.   

      

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