Low mortgage rates make refinancing very enticing for homeowners, providing big savings over time. But for many homeowners, the upfront costs aren’t feasible. Luckily, there is a new federally-backed option that gives more borrowers the opportunity to refinance, potentially reducing their monthly mortgage payments by hundreds of dollars.
Fannie Mae and Freddie Mac Mortgage introduced a new refinance program that includes reduced interest rates that could save financially disadvantaged borrowers up to $250 per month.
What are borrowers’ qualifications?
To be eligible for the program, borrowers must:
- have a Fannie Mae-backed mortgage for their house.
- live in the house as their primary residence.
- have income at or below 80% of median income in their area.
- have missed no payments in the previous six months and no more than one in the previous 12 months.
- not have a loan-to-value ratio above 97%.
- have a debt-to-income ratio below 65%.
- a FICO credit score of at least 620.
What are the lenders’ obligations?
If you qualify for the new programs, your lender must provide a credit of up to $500 for an appraisal if you need one and waive the usual 0.5% fee for borrowers with loan balances at or below $300,000. Additionally, lenders are required to reduce the borrower’s monthly mortgage payment by at least $50 – it could me more – and give borrowers at least a half a percentage point reduction in their interest rate.
Ready to learn more?
If you are ready to explore refinancing through the Fannie Mae and Freddie Mac programs, connect with one or our licensed mortgage consultants today to find out if one of these loan programs might be right for you. Simply give us a call or click the buttons below.
Call us today: (888) 379-0303
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Stamford, CT 06901