| Fannie And Freddie Relief Programs Are Good Like An Uncomfortable Chair |
| Articles - Mortgage |
|
Fannie Mae and Freddie Mac have been doing refinance loans for borrowers that are backwards in their homes. Backwards is capped at 105% of the appraised value, which is helpful for those who are not too backwards in their homes.
Fannie Mae and Freddie Mac have been doing refinance loans for borrowers that are backwards in their homes. Backwards is capped at 105% of the appraised value, which is helpful for those who are not too backwards in their homes. To give you an idea of what you could borrow, if your home value is $250,000, you could borrow up to $262,500. Keep in mind, doing a refinance has costs involved, so you may or may not have to have money to bring in to close the new loan. If qualified, these programs are still a better option than doing an FHA refinance, which has a 1% Upfront MI fee, plus a .85 or .9 monthly MI payment and a max of 97.75% to the appraised value. Refinance home loans are very tempting to do with the rates being so good, but home values can limit the ability to take advantage of these rates. Here are some things you should know. Fannie Mae or Freddie Mac must already own your mortgage and you can only take advantage of the current owners relief program. Both Fannie and Freddie will allow up to a 60% debt-to-income ratio for owner occupied, single family homes and 50% DTI for second or investment homes. You must also have a minimum 620 credit score for the Freddie Mac programs and a minimum 620 credit score for owner occupied homes and a minimum 680 credit score for second or investment homes with Fannie Mae. The programs are designed for stick built 1-4 unit residential homes, but can be owner occupied, second homes, or investment. Program restrictions do vary based on the combination of these options. Fannie and Freddie allow up to 60% debt-to-income ratios for owner occupied, single family homes and 50% DTI for second and investment homes. Another restriction of both programs would be that ownership can not change from the loan being refinanced. So if you are looking to add or remove a borrower from the original loan, you would not be eligible on these programs. Cash back at close is restricted to $250 for either program, but Freddie Mac only allows you to roll in $5000 in closing costs, so if you have minimal reserves available to close, this program might not affordable. The above information is simply an outline, so if you are interested in finding out eligibility and qualification, you do need to apply with a loan officer. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Learn more about refinance loans. |