Been thinking about refinancing your home but not quite sure if you’re in a position to do it? Help is on the way — if you meet some basic eligibility requirements. While home interest rates remain low by historical comparison, giving many homeowners good reason to pursue a refi, a certain group will soon have even more incentive. Beginning June 7, Fairway Independent Mortgage Corporation will be offering a “RefiNow” program aimed at a particular segment of homeowners. Let’s delve in a bit deeper to learn more.
The new refi program coming this month is through Fannie Mae. Created by Congress, Fannie Mae as well as Freddie Mac are loan companies that provide liquidity (ready access to funds on reasonable terms), stability and affordability to the mortgage market. By attracting to the secondary mortgage market investors who might not otherwise invest in mortgages, Fannie Mae and Freddie Mac expand the pool of funds available for housing. That makes the secondary mortgage market more liquid. It also helps lower the interest rates paid by homeowners and other mortgage borrowers.
Fannie Mae’s “RefiNow” program opens June 5 and will be available through Fairway two days later. Most expect Freddie Mac to launch its own similar initiative later this summer.
Through “RefiNow,” it’s estimated some 2 million homeowners will lower their mortgage interest rate. In turn, monthly mortgage payments will also drop.
The Federal Housing Finance Agency estimates that “RefiNow” will save homeowners an $100 to $250 a month. Mortgage lenders, meanwhile, will be required to reduce the borrowers’ monthly mortgage payment by at least $50 and reduce borrowers’ mortgage interest rate by at least one half of one percent.
To take advantage of RefiNow, homeowners must have a Fannie Mae-backed mortgage as well as income that doesn’t exceed more than 80% of their area’s median income. In addition, it’s required that the homeowner hasn’t missed a mortgage payment in the last six months or more than one payment in the past year.
On top of this, the loan-to-value ratio of the homeowner’s mortgage can’t exceed 97%. And last but not least, the homeowner must have a debt-to-income ratio below 65% and a minimum FICO credit score of 620.
Don’t sweat it if you don’t qualify for the “RefiNow” program. Not everyone will. But home interest rates remain ultra-low, making it a great time to strongly consider refinancing your home. Contact us today at Fairway of the Carolinas. Any one of our skilled mortgage advisers will happily assist you. Let’s connect soon!