[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 have recently been coming in between 3.5 and 5.0%. 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 Home 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 if 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.
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 “Home Affordable Refinance Program” or HARP loan (aka the “DU Refi Plus” program) — With President Obama’s HARP plan qualified homeowners can refinance a conventional first mortgage which is backed by Fannie Mae or Freddie Mac for up to 125% of the current value of the home currently. However with the upgrades planned the HARP program there should soon be no loan-to-value (LTV) limits. Further while this program has not always worked well for people currently pay mortgage insurance (PMI) the changes for HARP 2.0 will reportedly allow borrowers with PMI to participate. The HARP program does not allow second mortgages to be combined with first mortgages but will allow the first mortgage to be refinanced with the second mortgage staying in place (called a subordination). Contact us in the sidebar to learn more about this program.
5. Loan Modification Programs — If you owe significantly more on your first mortgage than your home is worth and/or are on the verge of foreclosing your best bet is often 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. See this page or 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. Click here to connect with an agent to investigate that route. The Obama administration recently announced a program designed to give incentive to more homeowners and banks to use this strategy.
6. Other Alternatives — See this page for some thoughts on dealing with burdens brought on be unsecured 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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