As before, the borrowers must meet credit and loan requirements, but this program will help MANY people stay in their homes through lower rates and payments.

Here, in a nutshell, are some of the requirements for the “DU REFI PLUS” program (check with us for more details and specific borrower eligibility):

1. The existing loan must have been sold to Fannie Mae. This can be determined via the loan look-up tool on www.FannieMae.com

2. All existing loan types are eligible, as long as the loan was sold to Fannie Mae – rental properties, 2nd homes, primary, fixed rate, adjustable, interest-only.

 3. Borrower may roll in all closing costs and prepaid items, but may not receive more than $250 in cash at closing.

4. Borrower must receive tangible net benefit from refinance in the form of: A) reduction in rate, B) reduction in payment, C) reduction in term, D) conversion from ARM to fixed.

5. No NEW subordinate financing (aka, 2nd mortgage) is allowed; any existing subordinate financing (including purchase-money 2nd mortgages) must be subordinated.

6. No one currently on the mortgage or title can be removed, but someone can be added.

As an added bonus, an appraisal may NOT be required in some cases.

Call Todd Abelson and Tyler Ford at Sunstreet Mortgage, Tucson, Arizona for all your mortgage needs or visit www.TucsonMortgages.com !

Expected to help 5 million homeowners, the Making Home Affordable program “looks the other way” with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the homeowner.

Not every homeowner is eligible for a Making Home Affordable refinance, however.  There are 3 basic criteria that must be met.

First, your existing home loan must be backed by either Fannie Mae or Freddie Mac.  Thankfully, both companies provide online lookup services.  Start with the Fannie Mae site because Fannie has a greater market share and because Freddie Mac’s site requires your social security number.

Next, you must have a perfect mortgage payment history over the last 12 months.  Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program.  It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home’s value by more than 5%.  The math formula is (Mortgage Balance) / (Home Value).  If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

1. If you didn’t pay mortgage insurance prior to refinancing, you won’t have to pay it after refinancing — even if your loan-to-value exceeds 80%.
2. All refinances require income verification — even if the original mortgage was a stated income loan.
3. Second mortgages cannot be paid off using loan proceeds — they must be subordinated

There are other guidelines, too, and both Fannie Mae and Freddie Mac have dedicated portions of their website to the Making Home Affordable program. To the layperson, unfortunately, the information may be a bit technical. 

Even the government’s fact sheet can be a little dense at times.

Therefore, if you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan.  If they are, pick up the phone and call your loan officer to plan next steps.

The program ends June 10, 2010 so give Tyler Ford or Todd Abelson of Sunstreet Mortgage a call to see if you are eligable.

A terrific example is the chart at right.

Published by Freddie Mac, it shows the 30-year fixed mortgage’s “going rate” as reported by the nation’s mortgage lenders. On December 30, 2008, that rate was 5.1 percent.

But 5.1 percent is only half of the relevant information.  There’s a mandated fee schedule that accompanies the Freddie Mac-reported rate survey.

Currently, the published fee required to get a 5.1 percent mortgage rates is 0.7% of the borrowed amount, or $700 per $100,000 borrowed.  This fee is more commonly known as “points” and versus last year, it’s nearly doubled from 0.4 points.

So, yes, conforming mortgage rates are low and they have fallen near all-time lows but there’s more to the story than just the interest rate — there are the fees that go with them, too.

Mortgage rates and loan fees often move in opposite directions so to get lower rates, consider paying additional points.  Conversely, to face fewer fees, accept a higher rate.  It’s a trade-off and we can help you best understand the choices.

Give Tyler Ford and Todd Abelson of Sunstreet Mortgage a call to discuss your refinancing options.

www.tucsonmortgages.com

(Image courtesy: The Wall Street Journal)

ATTENTION TUCSON HOME OWNERS !

30 year fixed rates are currently below 5%!

Did you know you pay more towards principle and build equity quicker with a lower interest rate?

Take advantage of historically low interest rates by refinancing today. You will saving thousands of dollars over the life of your loan.

Give Tyler Ford and Todd Abelson of Sunstreet Mortgage a call today by dialing 331-LEND (5363) for a FREE refinance analysis. We will prepared a detailed break down of what your monthly savings would be should you refinance plus show you how much you will save over the life of your loan.

There is no obligation! Give us a call today. We will beat Wells Fargo, Country Wide, Long Mortgage, Nova, or any other lender in Tucson.

The paperwork, signed by both parties, includes provisions for things like:

• The interest rate
• The length of the loan
• The amount of money to be borrowed

But, like all loans, a mortgage loan can be paid off at any time.  So, when market interest rates fall, homeowners will often exercise their right to an “early payoff” by securing a new loan that pays off the old one.

This process is most commonly known as a refinance.

A refinance is the changing of the loan terms against a property, often for a better interest rate or a lower monthly payment.  When the refinance process is complete, the original lender’s loan is paid in full using the money from the new lender’s loan and the former’s relationship is officially terminated.

There’s no rule against how many times a person can refinance, nor is there an easy way to determine whether or not a refinance makes sense.  In general, if you can reduce your monthly payment while limiting your closing costs, to refinance is a smart decision. 

However, there are other reasons to refinance, too, including:

1. To convert from an ARM into a fixed rate mortgage (or vice versa)
2. To extract equity for paying off third-party debts or for cash
3. To extend a loan from 15 years to 30 year for payment relief

Because there are fewer third-parties involved with a refinance, it’s often simpler and less expensive than a comparable purchase transaction.  The paperwork stack is often smaller, too.

Rates have moved down sharply and are now at historic lows. Give Tyler Ford or Todd Abelson a call today to see if a refinance makes since for you. Call 520-331-LEND (5363)