Underwater? Fannie Mae Offers Great Program to Help People Refinance
The mortgage problems of the last 6 years have left a lot of people holding a mortgage on a home with a significantly decreased value (although improving). Some people have even wondered if they should stay in the home. In order to help these homeowners recover from the down turn Fannie Mae introduced the DU Refi Plus program. This loan resource can help homeowners get a better rate on their current loan even if their current mortgage balance is higher than the home’s appraised value.
Very Flexible Guidelines
The DU Refi Plus is available for people who received a Fannie Mae loan any time before June 1 of the year 2009. The borrower’s credit score must be a 620 (lender overlays may require a higher score to qualify) and the home cannot be a single wide manufactured home or a co-op. And the borrower is not allowed to get cash in the deal. Other than those few rules, everything else is fairly flexible.
The loan to value can be almost unlimited since the computer models determine who is approved based on a host of factors. The loan amount can reach up to the conforming limit of $417,000. Borrowers can choose a fixed term from 10 to 30 years. In some cases an appraisal is not required.
One Primary Benefit to the Borrower
Based on the rules above it would seem that almost anybody can qualify for the DU Refi Plus loan. In order for the loan to be approved the borrower must receive a discernible benefit in the loan in one of two ways. First, the principal and interest amount of the mortgage payment must be reduced. If the payment stays approximately the same then the loan must be a more stable mortgage for the customer. For example, if the payment only dropped by $10, that would not be much of a benefit. However, if the borrower currently has an adjustable rate loan that is about to end its fixed period, then the more stable loan could benefit the homeowner for years to come.
- Important Disclosure
If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP. You can determine whether your mortgage is owned by either Freddie mac or Fannie Mae by checking the following websites:
www.freddiemac.com/mymortgage or https://www.fanniemae.com/loanlookup/