In early June, Fannie Mae and Freddie Mac rolled out a new refinancing option for low-income people for homeowners, which would save them around $ 100 to $ 250 per month. Now, Fannie Mae has released a program update that will allow homeowners who were forborne from COVID-19 to also take advantage of the refinancing option.
In one Lender letter Sent on Wednesday, Fannie Mae made three key updates to her schedule:
- Allow simultaneous refinancing of an outstanding subordinate financing or a second debt that pays an amount not covered by a primary mortgage
- Allow borrowers who have missed payments during the COVID-19 abstention period to be eligible
- Clarification of lender requirements for program pay stubs
If you are considering refinancing your mortgage, you can use Credible to see your options and interest rates.
FHFA’S NEW MORTGAGE REFINANCING OPTION COULD REDUCE PAYMENTS PER HUNDREDS FOR SOME OWNERS
Under the previous conditions, Fannie Mae demanded that homeowners have not missed any payments on their home loan in the past six months and that they have missed only one payment in the past 12 months. And while this is a more flexible requirement than what is normally required for mortgage refinancings, this week’s update has further expanded who is eligible for refinancing.
Now, borrowers who have missed a payment on their mortgage in the past 12 months due to a COVID-related forbearance period can still refinance, if certain conditions are met. Fannie Mae requires homeowners to be up to date with their mortgage before using her RefiNow Low Income Refinance Option. However, there are several ways homeowners can meet this requirement.
If you want to know if you qualify for low income refinance through Fannie Mae, visit Credible to speak with a mortgage expert and get all your questions answered.
THE FEDERAL RESERVE CHOOSES TO KEEP INTEREST RATES AT 0%
One way for homeowners to be up to date on their mortgages is to simply pay off missed payments. This would qualify them for the Fannie Mae refinance option. However, for many this is not possible.
Fannie Mae also offers several loss mitigation solutions under which a homeowner would still be eligible to use the refinance option. Here are ways a homeowner with a mortgage backed by Fannie Mae can get up to date on their home loan:
- Repayment plan: Homeowners must have made three payments under their new repayment plan or completed the repayment plan, whichever occurs first. The repayment plan does not need to be completed.
- Payment deferral: This allows homeowners to defer missed payments until the loan maturity date, or when they sell or refinance the loan. The borrower must have made three consecutive payments following the date of the deferment of payment agreement.
- Loan modification: This changes the terms of the loan, for example by changing the remaining years to pay off the loan or lowering the interest rate to reduce the monthly payments. The borrower must have completed the three month trial payment period.
If the homeowner has another loss mitigation program that is not listed, they must have completed the program or made three consecutive full monthly payments. If they meet these requirements, low-income homeowners will be able to refinance their mortgage through Fannie Mae’s RefiNow program.
To get a better idea of the refinancing options available to you, you can contact Credible to get in touch with a lender.
THE Fed is planning two rate increases by 2023 – how to lower your rate now
Other conditions to be eligible for the program include an income not exceeding 80% of the median income in the region, holding a loan guaranteed by Fannie Mae or Freddie Mac, a home equity of at least 3% and a credit score of at least 620.
These are all lower requirements than a typical mortgage refinance, and the goal of the program is to allow those hardest hit by the COVID-19 pandemic to benefit from historically low interest rates. today by refinancing their mortgage and saving on their monthly payment.
Discover Credible to see how much you could save and see the rates of several lenders at once.
Have a finance-related question, but don’t know who to ask? Email the Credible Money Expert at [email protected] and your question could be answered by Credible in our Money Expert column.