Government Refinance Program for Responsible Borrowers Begins Soon
There has been quite a bit of debate in the financial press recently about all of the government programs being attempted to try to restart the economy.
Meanwhile, there is continuing evidence that our personal balance sheets are being devastated by the housing crisis. For instance, First American CoreLogic recently announced that more than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth. Furthermore, an additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, and households with negative equity or near it account for a quarter of all mortgage holders.
In addition, the Case-Shiller home price report was recently released and showed nearly a 30% drop in home values since the peak. Furthermore, the composite index of nationwide home prices has dropped for 30 consecutive months. To read the press release, click here.
One of the more controversial government programs was the "Home Affordable Modification" program, where people who are late or at risk of becoming late on their mortgage payments would have the opportunity to rework their mortgages to stay in their current homes.
However, did you know that there is also a program available for responsible borrowers where you may be able to do a streamlined (i.e. lower cost) refinance, even if there is not a large amount of equity in your home? The qualifications for the program are as follows :
1) you must be the owner of a one-to-four unit home
2) you must have a loan guaranteed by FNMA or FHLMC
3) you must be current on your home loan payments over the last 12 months
4) your loan must be no more than 105% of the value of your home
To find out more about whether or not you qualify, you can contact your mortgage servicer. There are also additional details about the program at the Making Home Affordable website. If you're not sure if your loan is guaranteed by FNMA or FHLMC, there are tools available on this website to allow you to find out whether or not you meet that part of the qualifications by entering your home address.
Many lenders are going to start refinancing borrowers under this new program in April, so you may want to find out soon whether or not you qualify.
Furthermore, mortgage rates are approaching levels in the 4% - 5% range, so you may be able to save some money on your mortgage payment in the very near future.
Meanwhile, there is continuing evidence that our personal balance sheets are being devastated by the housing crisis. For instance, First American CoreLogic recently announced that more than 8.3 million U.S. mortgage holders owed more on their loans in the fourth quarter than their property was worth. Furthermore, an additional 2.2 million borrowers will be underwater if home prices decline another 5 percent, and households with negative equity or near it account for a quarter of all mortgage holders.
In addition, the Case-Shiller home price report was recently released and showed nearly a 30% drop in home values since the peak. Furthermore, the composite index of nationwide home prices has dropped for 30 consecutive months. To read the press release, click here.
One of the more controversial government programs was the "Home Affordable Modification" program, where people who are late or at risk of becoming late on their mortgage payments would have the opportunity to rework their mortgages to stay in their current homes.
However, did you know that there is also a program available for responsible borrowers where you may be able to do a streamlined (i.e. lower cost) refinance, even if there is not a large amount of equity in your home? The qualifications for the program are as follows :
1) you must be the owner of a one-to-four unit home
2) you must have a loan guaranteed by FNMA or FHLMC
3) you must be current on your home loan payments over the last 12 months
4) your loan must be no more than 105% of the value of your home
To find out more about whether or not you qualify, you can contact your mortgage servicer. There are also additional details about the program at the Making Home Affordable website. If you're not sure if your loan is guaranteed by FNMA or FHLMC, there are tools available on this website to allow you to find out whether or not you meet that part of the qualifications by entering your home address.
Many lenders are going to start refinancing borrowers under this new program in April, so you may want to find out soon whether or not you qualify.
Furthermore, mortgage rates are approaching levels in the 4% - 5% range, so you may be able to save some money on your mortgage payment in the very near future.
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