[Update -- The Fed and Obama administration have been compressing mortgage interest rates since the first part of 2009. Due to those efforts and other market factors mortgage rates on most 15-30 year fixed government-backed loans are currently coming in between 3.85% and 5.0% -- the lowest rates seen in the U.S. in 50 years. But mortgage interest rates may be significantly higher in a few months so contact us today if you are in an ARM or your fixed loan rate is higher than you would like. ]
President Obama recently announced updates to his Homeowner Affordability and Stability/ Making Home Affordable Plan. This plan is in addition to the finance bills passed by the US congress in 2008 and early 2009. The new laws and plans include stipulations should make it easier to refinance mortgages to the historically low interest rates we have been seeing recently. These new government-backed loans are the best and often only refinance option available for homeowners facing difficulties due to rising interest rates and increasing payments. Government-backed mortgages are also often the only viable refinance option for homeowners with credit scores below 700 or with less than 20% equity left in their home.
We help qualified homeowners obtain fixed rate government-backed mortgage relief loans.
For Homeowners Who Still Have Equity
With the traditional FHA loan program a homeowner can get a fixed rate loan for up to 97% of the current appraised value of their home. Via the new Homeowner Affordable Refinance Program (HARP) homeowners with conforming loans can now refinance up to 105% of the appraised value of their home. By taking advantage of Government Refinance Assistance you could save thousands of dollars on your mortgage payments over the next few years and have the peace of mind of knowing that your home is financed with a low fixed rate. Plus FHA allows homeowners in most states to get a cash out refinance for up to 85% of the current value of the home.
If you would like to learn it you are a candidate for a government-backed loan contact us today by filling in the contact form on the right. Also, if you are age 62 or older and have significant equity in your home you could look into a reverse mortgage — a type of loan that allows borrowers to remain in their homes until they die without making any further payments and in some cases allows the homeowner to receive regular checks from the equity in the home. Please let us know in the “Additional notes” section of the contact form on the right if you are interested in a reverse mortgage.
For Homeowners With No Equity
There are a few options for the millions of U.S. homeowners who owe more on their home than the property is currently worth. Here are a few:
1. FHA Streamline Refinance — If you are upside down / underwater on your mortgage and currently have an FHA loan then getting a refinance to an improved mortgage is possible if you have kept up with your mortgage payments. Contact us today if this applies to you.
2. A “Homeowner Affordability and Stability Plan/ Home Affordable Refinance Program” (HARP) loan — With President Obama’s new plan qualified homeowners can refinance a conventional first mortgage for up to 105% of the current value of the home (and in some cases 125%). However this program does not always work well for people who have second mortgages, credit scores below 680, or who currently pay mortgage insurance (PMI).
5. Loan Modification Programs — If you owe significantly more on your first mortgage than your home is worth or are on the verge of foreclosing your best bet is to seek a loan modification from your current lender. Loan modifications normally reduce payments by lowering interest rates or extending the loan period. Obama’s new “Home Affordable Modification Program” (HAMP) gives lenders incentive to modify troubled loans as well. Contact us in the sidebar if you would like to discuss strategies for seeking a loan modification.
4. FHA short refinance — See here for details and the latest news on the new FHA short refinance program. The FHA short refinance program is a variation of the loan modification theme but involves principal reductions rather than just rate reductions. Like loan modifications this program requires the voluntary cooperation of your current lenders and that can be tricky.
5. Selling short — A short sale is when a homeowner sells a home for less than they owe. In many cases the lender(s) will accept the sales proceeds as payment in full. The Obama administration recently announced a program designed to give incentive to more homeowners and banks to use this strategy.
Please note that for some borrowers none of the available refinance or modification programs end up being good solutions. See this page for some additional ideas on reducing debts.
Be sure to bookmark this site and check back for the latest updates on government-backed efforts focused on alleviating the housing crisis in the US (see stories below).
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