Refinance Upside Down Mortgage: Fannie Mae Refi-Plus – Is it Worth the Hype?
Mortgage and refinance rates have been historically low in 2010. Interest rates were driven to record lows to help the housing market recover from one of the worst housing recessions on record. After the boom in home building and the price of homes sky-rocketing funded by excess capital and very lose lending standards prices have come back to historical norms. Now is one of the best times ever to buy a home since mortgage rates are so low. Another reason why buying a home now is one of the best times to do so is because homes are so much more affordable.
So if your home doesn’t have 20% of its value in equity, how do you refinance your home and take advantage of the low mortgage rates? Well, the answer is the Fannie Mae Refinance-plus program which is a government program that is available to people who are upside down. So to keep thing simple we have a quick breakdown of the pros and cons of the program: The Pros: You can qualify if your home is upside down in value, up to 105% of the value of the home.
For example, if you owe 200,000 on your home, as long as your home value isn’t below $190,000 you can qualify. There is no minimum credit score, although it is likely there will be difficulty getting approved if your credit score is below 580
Mortgage Insurance (MI) is not required on the loan, however if you currently have (MI) you must retain your (MI) on the new loan
You can subordinate existing second mortgages, which means you keep the existing second mortgage with your existing lender.
To claim this, write a brief letter explaining your hardships, why you want to save your home, and what your new budget would be if you get a mortgage refinancing or modification. This letter will help Wells Fargo understand and offer you the best options possible. There are no closing costs or other fees associated with mortgage refinancing or modification when using this bailout plan. This means that thousands of dollars in savings are instant. Otherwise, this money would need to be spent on paying costs and fees like loan origination, points, and other costs.
All in all we find the Fannie Mae Refinance-Plus to be a good program with lots of benefits for people whose home values have dropped. Although there are a lot of determining factors for approval, it’s no more difficult that the approval factor with a traditional refinance.
Learn more about Obama Mortgage Relief Plan Qualifications.
