[Update — The Fed and Obama administration have been compressing mortgage interest rates for some time now. Due to those efforts and other market factors, mortgage rates and APR’s on most 15-30 year fixed government-backed mortgages have recently been coming in between 3.0 and 4.5%. But mortgage interest rates may be moving significantly higher soon so contact us today to learn more and get the process started.]
There are several government-backed home purchase programs designed to make it easier for Americans to buy a home. The goal of these programs is to allow for low down payments and to make it easier for people with less than perfect credit to qualify for a mortgage. With mortgage interest rates near historical lows and housing prices increasing across the country again, now is a terrific time to look into buying a home. Fill in the contact form on our home purchase programs page to learn more about the available government-backed purchase programs and perhaps to get pre-qualified for a home purchase loan.
For Homeowners Who Have Equity
There are several superb government-backed refinance programs for borrowers who have even a little equity in their homes and there are various good reasons to seek a refinance:
- Lower interest rates and monthly payments. With rates near all time lows still, refinancing to a better rate can help families save a lot of money.
- Get cash out. Home values are increasing across the country which allows for cash out refinances in many cases.
- Get rid of mortgage insurance (PMI). If you have at least 10% equity contact us to look at refinancing to remove monthly PMI payments.
- Reduce mortgage insurance payments. When there is not enough equity in the home to remove mortgage insurance entirely, borrowers can sometimes lower their mortgage insurance fees along with their interest rate. The FHA streamline program is especially useful for this purpose.
- Consider a reverse mortgage. For homeowners who are at least 62 years old and who have a lot of equity in their homes, a government-backed reverse mortgage can sometimes be beneficial. Reverse mortgages allow homeowners to utilize the equity in their homes to reduce or eliminate mortgage payments. Contact us to learn more about reverse mortgages.
- Refinance to a 15 year mortgage. Interest rates on 15 year fixed mortgages tend to be significantly lower than rates on 30 year fixed loans. The drawback is that monthly payments on 15 year mortgages are higher. But for borrowers who can handle somewhat higher payments, refinancing to a 15 year mortgage can mean paying the mortgage off much sooner and paying a lot less in interest over the the life of the loan.
Contact one of our counselors in the form in the sidebar to be pointed in the right direction on these options.
For Homeowners Who Are Underwater Or Upside Down On Their Mortgage(s)
There are several 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 currently have an FHA loan, refinancing to a better FHA mortgage through the FHA streamline program is an excellent option. It is a low cost, low headache process. Fill in the contact form on this page if you have an FHA loan and would like to learn more about the FHA-to-FHA streamline program.
2. VA streamline (IRRRL) Program — For borrowers who have a VA loan now, the VA to VA streamline (also known as the IRRRL program) is a terrific, low cost way to significantly reduce payments and interest rates, even for borrowers who are underwater on their homes. If you have a VA loan contact us to learn more about the IRRRL program.
3. HARP Refinances — With President Obama’s HARP program, qualified homeowners can refinance a conventional first mortgage which is backed by Fannie Mae or Freddie Mac no matter how underwater they are. (See here to find out if your conventional mortgage is backed by Fannie or Freddie.) As long as the current Fannie or Freddie loan was acquired prior to May of 2009 there should be no loan-to-value (LTV) limits. Further, while the HARP 1.0 program did not work well for people currently paying mortgage insurance (PMI), the changes in the HARP 2.0 program 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 remaining in place as is (called a subordination). See here for more on HARP 2.0 guidelines, features, and requirements. Contact us to learn more.
4. Loan Modification Programs — If you are unable to qualify for any other refinance program or if you are delinquent on your mortgage payments and are on the verge of foreclosing your best bet is often to seek a loan modification from your current lender. Loan modifications normally reduce mortgage 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.
5. Principal Reduction Programs — It is possible to get a principal reduction in some rare cases. Contact us to be pointed in the right direction on that.
6. Other Alternatives — In some cases seeking bankruptcy protection is the best option for a family when it comes to saving their home and getting back on their feet financially. Contact us at this page to learn more about that process. Or see this page for ideas on dealing with credit card 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). To contact us about your options just fill in the contact form in the sidebar.
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