Questions & Answers about the Making Home Affordable Refinance Program

• What is “Making Home Affordable" all about?

Making Home Affordable is part of President Obama's comprehensive strategy to get the housing market back on track. Through the Making Home Affordable Program, up to 9 million American families may be eligible to refinance or modify their loans to a payment that is affordable now and into the future.

HOME AFFORDABLE REFINANCE

• I'm current on my mortgage. Will the Home Affordable Refinance help me?

Eligible borrowers who are current on their mortgages but have been unable to take advantage of today's lower interest rates because their homes have decreased in value, may now have the opportunity to refinance into a 30 or 15 year, fixed rate loan. Through the Home Affordable Refinance program, Fannie Mae and Freddie Mac will allow the refinancing of mortgage loans that they own or that they placed in mortgage backed securities.

• How do I know if I am eligible?

You may be eligible if you:

•        Are the owner occupant of a one to four unit home.

•        The loan on your home is owned or controlled by Fannie Mae or Freddie Mac (Don't know? See below),

•        You are current on your mortgage payments (current means that you haven’t been more than 30-days late on your mortgage payment in the last 12 months.)

•        You believe that the amount you owe on your first mortgage is about the same or slightly less than the current value of your house, and

•        You have a stable income sufficient to support the new mortgage payments.

• How do I know if my loan is owned by Fannie Mae or Freddie Mac?

Noth Fannie Mae and Freddie Mac have established toll-free telephone numbers and web submission processes to make this data available. Borrowers will provide or enter information to determine if either agency owns or securitized the loan. This information is not a guarantee of eligibility for the refinance program, as other qualifying criteria must also be met.

 For Fannie Mae:

                        1-800-7FANNIE (8am to 8pm EST).

www.fanniemae.com/homeaffordable 

               Freddie Mac :

1-800-FREDDIE (8am to 8pm EST)

              www.freddiemac.com/avoidforeclosure/

• I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?

Eligible loans will include those where the first mortgage will not exceed 105% of the current market value of the property. For example, if your property is worth $200,000 but you owe $210,000 or less you may qualify. The current value of your property will be determined after you  apply to refinance.

• I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?

As long as the amount due on the first mortgage is less than 105% of the value of the property, borrowers with more than one mortgage may be eligible for a Home Affordable Refinance. Your eligibility will depend, in part, on agreement by the lender that has your second mortgage to remain in a second position, and on your ability to meet the new payment terms.

• Will refinancing lower my payments?

The objective of the Home Affordable Refinance is to provide creditworthy borrowers who have shown a commitment to paying their mortgage, the opportunity to get into a safe fixed rate mortgage with payments that are affordable today and sustainable for the life of the loan. Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. Borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see their current payment go down if they refinance to a fixed rate and avoid future mortgage payment increases. These borrowers, however, could save a great deal over the life of the loan. When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.

• What are the interest rate and other terms of this refinance offer?

The objective of the Home Affordable Refinance is to provide borrowers with a safe loan program with a fixed, affordable payment. All loans refinanced under the plan will have a 30 or 15 year term with a fixed interest rate. The rate will be based on market rates in effect at the time of the refinance and any associated points and fees quoted by the lender. Interest rates may vary across lenders and over time as market rates adjust. The refinanced loans will have no prepayment penalties or balloon notes.

• Will refinancing reduce the amount that I owe on my loan?

No. The objective of the Home Affordable Refinance is to help borrowers get into safer, more affordable fixed rate loans. Refinancing will not reduce the principal amount you owe to the first mortgage holder or any other debt you owe. However, refinancing should save you money by reducing the amount of interest that you repay over the life of the loan.

• Can I get cash out to pay other debts?

No. Only transaction costs, such as the cost of an appraisal or title report may be included in the refinanced amount.

• How do I apply for a Home Affordable Refinance?

You should call your mortgage servicer or lender and ask about the Home Affordable Refinance application process. The number is on your monthly mortgage bill or coupon book. Please be patient. Lenders and servicers first received the detailed program requirements and it may take time before they are ready to accept applications. In the meantime, it will help your lender and speed up the application process if you gather some information and documents before you call.

• What documentation will I need?

It will help your lender if you gather some information and documents before you call. You will need:

•        Information about the monthly gross (before tax) income of your household, including recent pay stubs if you receive them or documentation of income you receive from other sources.

•        Your most recent income tax return.

•        Information about any second mortgage on the house.

•        Account balances and minimum monthly payments due on all of your credit cards.

•        Account balances and monthly payments on all your other debts such as student loans and car loans.

• I am delinquent on my mortgage. Will I qualify for a Home Affordable Refinance?

No. Borrowers who are currently delinquent on their mortgage will not qualify. You should see if a Home Affordable Loan  Modification is an option for you. CLICK HERE for more info.

APPLY NOW FOR THE HOME AFFORDABLE REFINANCE