Thursday, May 7, 2009

105% Mortgage Refinance

Lenders are now announcing if they will offer the new Refi Plus program that was structured by FNMA to assist some homeowners who are faced with declining property values. The program details are now being announced, but some rules are clear.

First, the Refi Plus program targets those homeowners who have made their payments on time, are good risks, but simply cannot refinance to a lower rate because their appraised property value has declined. You can refinance your home up to 105% if its current value. Here are some highlights of the program:

Second mortgages cannot be paid off with this refinance. They must be subordinated, meaning that the holder of those 2nd liens must accept the fact that they will remain in the second position in regards to the prioritization on liens for payoff considerations.

These are credit qualifying loans. While details are still being announced, it appears that the minimum middle credit score must be 660.

Mortgage payment history must show no payments in excess of 30 days late in the past twelve months.

Debt-to-income Ratios – will be considered, so the total monthly credit debt for a borrower cannot exceed 45% of their gross monthly income.

Interest rates are considerably higher than the best rates offered, which makes sense when one realizes the excessive risk of a lender giving someone more money than the home is currently worth.

The existing mortgage must be owned now by FNMA. Curious if your loan may qualify? Visit www.fanniemae.com and click on the window that says “Does Fannie Mae Own Your Mortgage?”

More information will follow over the next several days as program guidelines are interpreted, and interested homeowners should contact their current mortgage servicer to learn if they will offer this program.

Visit www.thebriteway.com is you would like to apply for any type of mortgage.

Happy Thursday!

2 comments:

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