A mortgage resource for home buyers in the State of Idaho
Obama’s National Refinance Thoughts
Posted 09-15-2009 at 09:53 PM by cballhagen
Homeowners across the US are asking if they qualify for the Obama refinance campaign. The program is suppose to assist approx 4 million home owners with some type of re-structuring of their current mortgage situation.
What the campaign was basically design to do is assist homeowners with an refinance their existing mortgage. There would be no “cash out”. Just reducing the rate. Most people looking to refinance have rates in the 6.5 to 7.5% range. When the rates were approaching 4.5%, earlier in the year, a refinance was definitely worth looking into. It still might be if your rate is above 6.5%.
Here are some basic questions for homeowners who are considering the programWho “owns” my loan? Is it Fannie Mae or Freddie Mac or someone else? Most mortgages are “owned” by one company and “serviced” by another or the same. Find out who owns your loan. Call the customer service number on your monthly payment coupon that you get in the mail each month. Ask them “who owns my loan”? If you are put on hold for 2 0r 3 hours…[*]Go to the Fannie Mae or Freddie Mac sites and follow the steps to see if they own your loan. It is best for the homeowner if their loan is owned by Fannie Mae. That will give the homeowner more choices of which lenders they can use. If the loan is owned by Freddie mac, the homeowner must go back to the original mortgage company that issued their current mortgage.
If the loan is not owned by Fannie or Freddie, the home owner doesn’t quality for the program. What IS the program? Due to the dropping home values across the US, may home owners have not been able to refinance using the normal loan-to-value guidelines of 80%. The best scenario, for a refinance to happen is to keep the new mortgage less the or equal to no more than 80% of the appraised value.. If you go above the 80% mark, then the lender will require private mortgage insurance . It is a monthly fee that most homeowners try to avoid which would cancel out any refinance savings. Go to micanews.com for more information about MI. What the Obama program allows is for the loan-to-value go above the 80% level, without MI. There is much, much more to the program then I put in one paragraph. The actual guidelines are 4 or 5 pages. Contact your local lender for all of the details.
What homeowners need to know is:
If the answer is YES, then you have some work to do. I would start with a complete overhaul of your household expenses by putting pen to paper and MAKE A BUDGET! I know that can be a very painful statement, but it has to be done. You will have to make some tough decisions and do what you have to do to keep your mortgage current. If a homeowner finds themselves wasting money, that could be the difference in saving your home. There are tons of money saving tips online. Take the time and TAKE CONTROL OF YOUR FINANCIAL FUTURE! Sell one of your 3 cars and ride the bus? Cut up all of your credit cards? Major changes need to be made if you are not managing your money properly.
A homeowner also needs to keep communicating with their lender. Many homeowners have been successful with having their rate reduced and sometimes a principal reduction.
It is a homeowners responsibility to at least try rather than just walk away from their mortgage.
Craig Ballhagen-Guild Mortgage- Boise -208-713-3309
What the campaign was basically design to do is assist homeowners with an refinance their existing mortgage. There would be no “cash out”. Just reducing the rate. Most people looking to refinance have rates in the 6.5 to 7.5% range. When the rates were approaching 4.5%, earlier in the year, a refinance was definitely worth looking into. It still might be if your rate is above 6.5%.
Here are some basic questions for homeowners who are considering the programWho “owns” my loan? Is it Fannie Mae or Freddie Mac or someone else? Most mortgages are “owned” by one company and “serviced” by another or the same. Find out who owns your loan. Call the customer service number on your monthly payment coupon that you get in the mail each month. Ask them “who owns my loan”? If you are put on hold for 2 0r 3 hours…[*]Go to the Fannie Mae or Freddie Mac sites and follow the steps to see if they own your loan. It is best for the homeowner if their loan is owned by Fannie Mae. That will give the homeowner more choices of which lenders they can use. If the loan is owned by Freddie mac, the homeowner must go back to the original mortgage company that issued their current mortgage.
If the loan is not owned by Fannie or Freddie, the home owner doesn’t quality for the program. What IS the program? Due to the dropping home values across the US, may home owners have not been able to refinance using the normal loan-to-value guidelines of 80%. The best scenario, for a refinance to happen is to keep the new mortgage less the or equal to no more than 80% of the appraised value.. If you go above the 80% mark, then the lender will require private mortgage insurance . It is a monthly fee that most homeowners try to avoid which would cancel out any refinance savings. Go to micanews.com for more information about MI. What the Obama program allows is for the loan-to-value go above the 80% level, without MI. There is much, much more to the program then I put in one paragraph. The actual guidelines are 4 or 5 pages. Contact your local lender for all of the details.
What homeowners need to know is:
- This process takes a long time. The investors that own these loans, are not in a big hurry to lower your interest rate AND allow your equity position go above the 80% level.
- It will lcost you. Be prepared to pay for an upfront, non-refundable, appraisal fee, anywhere from $400-600. An appraisal will be done regardless of the value. If it comes in to low, meaning you owe more than the property is worth, you are out the fee. See ya later.
- The reality. The mortgage company, in Boise, I work for, has about 15 loan officers and very few have been able to get these loans closed. The investors who own these loans, make it very difficult. The companies probably feel that this group of homeowners are a heart beat away from foreclosure and they just aren’t worth it. I don’t know, just a guess.
If the answer is YES, then you have some work to do. I would start with a complete overhaul of your household expenses by putting pen to paper and MAKE A BUDGET! I know that can be a very painful statement, but it has to be done. You will have to make some tough decisions and do what you have to do to keep your mortgage current. If a homeowner finds themselves wasting money, that could be the difference in saving your home. There are tons of money saving tips online. Take the time and TAKE CONTROL OF YOUR FINANCIAL FUTURE! Sell one of your 3 cars and ride the bus? Cut up all of your credit cards? Major changes need to be made if you are not managing your money properly.
A homeowner also needs to keep communicating with their lender. Many homeowners have been successful with having their rate reduced and sometimes a principal reduction.
It is a homeowners responsibility to at least try rather than just walk away from their mortgage.
Craig Ballhagen-Guild Mortgage- Boise -208-713-3309
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