mortgage

Do you qualify for refi plan?

  • No minimum credit score is required. However, borrowers whose credit is impaired may be offered a higher interest rate.
  • The borrower must complete a standard loan application.
  • An appraisal may be required.
  • More information can be found on Fannie Mae's Web site.

Freddie Mac Relief Refinance Mortgage rules

Objective: Freddie Mac's Home Affordable Refinance program, known as the Relief Refinance Mortgage, is designed to assist borrowers who are current on their mortgage payments, but would benefit from refinancing into a mortgage that would better position them for long-term homeownership. The program may be used to reduce the borrower's interest rate, shorten the loan repayment period or replace an adjustable-rate mortgage, interest-only mortgage or balloon/reset mortgage with a fixed-rate loan.
  • To qualify, the borrower must have an existing mortgage that is owned or guaranteed by Freddie Mac. To find out whether Freddie Mac owns or guarantees your loan, call (800) 373-3343, call your loan servicer or search for your loan on Freddie Mac's Web site.
  • Borrowers can apply for this program through their current loan servicer or any Freddie Mac-affiliated lender. Borrowers who apply through their current servicer won't have to have their loan re-underwritten in most cases, but borrowers who switch to a different lender will have to have their loan re-underwritten.
  • The new mortgage can be a 15-, 20- or 30-year, fixed-rate loan or an adjustable-rate mortgage  with an initial term of five, seven or 10 years. The loan must be fully amortizing (i.e., not an interest-only or payment-option loan). An existing fixed-rate mortgage may not be refinanced with an ARM.
  • The property may be a vacation/second home if the existing mortgage was originated as a second-home loan or the borrower now occupies the home as a principal residence.
  • The property may be an investment property if the existing mortgage was originated as an investment property or the borrower now occupies the home as a principal residence.
  • The existing loan, new loan or both may be a so-called "super-conforming" loan limit within the applicable loan limit for the area.
  • If the original loan is covered by mortgage insurance, the insurer must agree to transfer the insurance to the new loan.
  • The new loan cannot be used to make a payment on or pay off a second loan.
  • Lenders are encouraged to use Freddie Mac's automated valuation model, or AVM, to estimate the property's current market value. Borrowers should ask whether a new appraisal will be required.
  • Borrowers may be able to finance an additional $5,000 or up to 4 percent of the new loan amount, whichever is less, to pay closing costs, financing costs or prepaid sums due at closing.
  • Borrowers whose monthly payment increases 20 percent or more must provide income and employment documentation and have an acceptable credit score and debt-to-income ratio to demonstrate they can afford the new higher payment. (This scenario typically applies only to borrowers who want to refinance an ARM, interest-only or payment-option type of mortgage, which has a very low interest rate.)
  • More information may be found on Freddie Mac's Web site.

 

 

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