In today’s real estate market, a home affordable refinance program can provide you with a much needed financial boost. With this new financing option, you can buy your dream home at a more affordable price, and you can even refinance your existing mortgage loan to take advantage of today’s low interest rates. However, to qualify for this type of home loan, you have to be willing to go through a process that can be daunting. You must submit a complete income tax return, property tax bills, pay stubs, and any other documents that your lender may require.
Loan-to-value ratios of up to 125 percent
The Home Affordable Refinance Program (HARP) allows qualified homeowners to refinance their homes at loan-to-value ratios as low as 125 percent. HARP is a federal program that helps homeowners with underwater mortgages save money on their loans. It has been successful in reducing delinquency rates and helping borrowers gain equity in their homes.
When real estate values are low, homeowners are unable to obtain enough home equity to purchase a new home. A 125% mortgage allows homeowners to refinance their existing homes and increase the amount of home equity they have. They can also use the proceeds of a refinance to pay off higher interest debt. However, a 125% loan comes with more risk for both the lender and the borrower.
In the past, many homeowners were unable to refinance because they owed more on their home than it was worth. If they could not afford to pay for their mortgages with high interest rates, they were left to default on their loans.
As part of the federal housing rescue program, Fannie Mae and Freddie Mac are working to help struggling borrowers. Recently, they announced that they are increasing the loan-to-value ratios that they will allow to qualify for a refinance. This will provide more homeowners with the ability to take advantage of the HARP program.
Initially, HARP limited the loan-to-value ratio to 125 percent. This limit was designed to ensure that only those who were qualified to receive a lower interest rate would be able to qualify for a refinance. Now, Freddie Mac and Fannie Mae are expanding their programs to provide more borrowers with the opportunity to benefit from the HARP.
Loan-to-value ratios are used by lenders to determine whether or not a borrower has a safe lending risk. Lenders determine a home’s value by taking the appraised price and subtracting the mortgage balance from the property’s value. The higher the loan-to-value ratio, the more likely it is that a borrower will default on his or her loan.
The new HARP program will allow homeowners to refinance with a loan-to-value ratio of 105 to 125 percent. Borrowers must be current on their mortgage payments and must have had a good payment history for the last six months. Qualifying for a refinance is not an easy task, but it is an option for those with severely underwater homes.
Because of the escalating foreclosure crisis, the Obama administration is trying to get housing affordability back in place. By increasing the refinance eligibility of low-to-mid-income homeowners, they can better secure a loan with a lower interest rate and pay off their debts faster.
The expansion of HARP will not only help low-income borrowers, but it will also improve the quality of mortgages that Freddie Mac and Fannie Mae sell. With a longer mortgage term, a homeowner can pay off their mortgage faster and reduce their monthly payments.
Loan modification with your lender
A loan modification is a way to improve your financial outlook by lowering your interest rate, extending the term of your mortgage, or both. It also helps to avert foreclosure. You might qualify for a mortgage modification if you are having difficulty making your monthly mortgage payments. For example, you may be having trouble meeting your property tax bill or are paying more than the amount of your mortgage in interest. Luckily, there are companies out there that can help you with these and other problems.
Loan modifications are not for everyone. If you have a bad credit score, you might have trouble finding a lender willing to do business with you. The government is taking a stab at reversing this trend by offering incentives to lenders who agree to a modification. To be eligible for a loan modification, you have to be at least 60 days behind in your payments. In some cases, you might need more than one nudge to get a lender to approve your application.
The home affordable mortgage is a program designed to make housing more affordable for Americans. Through the program, borrowers can choose from several mortgage programs including the FHA or VA and the Home Affordable Refinancing Program (HARP). With the help of a loan modification, you can make your mortgage payments more manageable. Lenders might even offer a better interest rate, which is a win/win situation for both parties. Some homeowners even have the option of refinancing their mortgage for a fixed or adjustable rate. Regardless of your situation, it pays to do your homework and choose the loan that suits you. There are a few things to know about mortgages, including what types of lenders are out there and what you can expect from them.
As with any type of home improvement project, you need to be armed with the right information. For example, you need to be aware of the fine print. Do your research and don’t be swayed by offers that sound too good to be true. Make sure you have all the details figured out and you’ll be on your way to saving a ton of money and enjoying a stress-free life.
