mortgage

Do you qualify for refi plan?

  • Borrowers are encouraged to gather documents before they contact a lender or loan servicer. Recommended documents include:
    • Paycheck stubs or other income-related documents.
    • Recent income tax return.
    • Information about any second loan secured by the property.
    • Account balances and monthly minimum payments on credit cards, student loans, car loans and other debts.
  • Borrowers are encouraged to complete the short self-assessment questionnaire to obtain a preliminary indication of whether they may be eligible for this program.
  • This program will end June 10, 2010, unless that deadline is extended.
  • More information may be found at Making Home Affordable. Borrowers should be very careful to consult only the government's official Web site, as a number of copycat Web sites have sprung up to entrap the unwary. Some sites copy the government Web site and change the telephone number at the top.

Fannie Mae Home Affordable Refinance rules

Objective: Fannie Mae's Home Affordable Refinance program is intended to help borrowers refinance to reduce their monthly principal-and-interest payment or switch from a risky loan product such as a short-term, adjustable-rate mortgage, or ARM, or from an interest-only mortgage to a fixed-rate mortgage.
  • To qualify, the borrower must have an existing mortgage that is owned or guaranteed by Fannie Mae. To find out whether Fannie Mae owns or guarantees your loan:
    • Call (800) 732-6643.
    • Send an e-mail.
    • Call your loan servicer.
    • Search for your loan on Fannie Mae's Web site. Be sure to read Fannie Mae's FAQs  about the loan lookup service.
  • Borrowers can apply through any lender that has been approved by Fannie Mae and authorized to offer this program. However, some borrowers may find that they need to refinance through their original lender or loan servicer. (Lenders should refer to "Announcement 09-04: Home Affordable Refinance -- New Refinance Options for Existing Fannie Mae Loans" for more information.)
  • The new loan may be a fixed-rate mortgage or an ARM with an initial fixed-rate period of at least five years. The payback period may be as long as 40 years.
  • So-called "jumbo-conforming" or high-balance loans that meet loan-limit requirements may be eligible.
  • Vacation/second-home and investment properties may be eligible.
  • The borrower may be able to finance closing costs or take out cash of up to 2 percent of the mortgage amount or $2,000, whichever is less. Fannie Mae's guidelines state that this cash-out allowance "is intended to provide lenders with operational efficiencies to account for differences in payoff amounts or closing cost items and is not intended to be added to every limited cash-out refinance transaction for the sole purpose of providing cash to the borrower."
  • The borrower cannot take out cash to reduce the balance on or pay off a second loan or home-equity line of credit, or HELOC.
  • The borrower must have sufficient income to afford the new loan payments. A verbal verification of employment is required. If the borrower is self-employed, this verification may be obtained from a certified public accountant, or CPA, regulatory agency or other "disinterested third party." The lender may request a copy of a business license or other form of verification that the business exists. A paycheck stub, recent tax return or other form of income documentation may be required as well.

 

 

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