What If You Have A Non
Federal regulators believe most non-government-backed lenders and loan servicers will adopt policies similar to those mandated by the CARES Act and subsequent legislation. To find out, contact your loan servicer, ask what programs it has in place to provide mortgage relief to homeowners impacted by the coronavirus outbreak, and follow any instructions you are given.
Although the CARES Act does not require private lenders to offer mortgage assistance, if you and your lender come to any type of loan modification agreement, then the law regarding not reporting reduced or paused payments to does apply to you.
If your mortgage forbearance is set to expire soon, then you may be able to request an extensionbut you must apply before forbearance ends.
Does The Government Offer Home Loans For Senior Citizens
The government-insured Home Equity Conversion Mortgage is a common reverse mortgage option for senior citizens above the age of 62. The HECM allows homeowners to convert their homes equity into cash to pay off their existing mortgage. In addition to other eligibility factors, the Department of Housing and Urban Development requires borrowers to complete a HUD-approved reverse mortgage counseling session.
Rocket Mortgage does not currently offer HECMs.
Freddie Mac Enhanced Relief Refinance
Similar to the Fannie Mae high loan-to-value refinance option, the Freddie Mac Enhanced Relief Refinance program benefits homeowners who have little equity in their home but want to refinance to more competitive rates. This program is geared toward homeowners who currently have a mortgage through Freddie Mac, are current on their payments, and arent eligible for a traditional refinance because their LTV ratios are too high.
With Freddie Mac Enhanced Relief Refinance, your minimum LTV ratio on a one-unit home would have to be 97.01%. Minimum LTV ratios will differ depending on how many units are in the home and whether its a primary or secondary home, or an investment property.
With this program, you arent required to pay for new mortgage insurance, and any existing mortgage insurance would transfer. You also dont need to provide as much documentation around income, employment, and assets as you would if you were moving forward with a conventional refinance.
You can use this Freddie Mac program to refinance your mortgage as many times as you want, whereas with HARP, you were limited to only one time. Unfortunately, though, if you were a beneficiary of HARP, you arent able to refinance again through the Freddie Mac Enhanced Relief Refinance.
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Are Refinance Rates Higher Than Purchase Rates
Refinance rates are generally higher than rates for new mortgages to buy a house. Here are some factors that influence the higher rates:
Credible is also partnered with a home insurance broker. If you’re looking for a better rate on home insurance and are considering switching providers, consider using an online broker. You can compare quotes from top-rated insurance carriers in your area it’s fast, easy and the whole process can be completed entirely online.
Think it might be the right time to refinance? To understand just how much you could save on monthly mortgage payments by refinancing now, crunch the numbers and compare rates using Credible’s free online tool. Within minutes, you can see what multiple mortgage lenders are offering.
here. Actual rates may vary.
Have a finance-related question, but don’t know who to ask? Email The Credible Money Expert at [email protected] and your question might be answered by Credible in our Money Expert column.
As a Credible authority on mortgages and personal finance, Chris Jennings has covered topics that include mortgage loans, mortgage refinancing, and more. Hes been an editor and editorial assistant in the online personal finance space for four years. His work has been featured by MSN, AOL, Yahoo Finance, and more.
What Is The Home Stimulus Program
Better known as the Homeowners Assistance Fund , this program is part of the American Rescue Plan for providing relief to Americans amid the COVID-19 pandemic. The purpose of the HAF is to prevent Americans from losing their homes, utilities or insurance during a time of economic hardship. More information about the HAF can be found on the U.S. Treasury website.
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Mortgage Rates: Homeowners Rush To Refinance During Rate Pause
Homeowners hurried to refinance their mortgages this week, capitalizing on a break from recent rate increases that added more than a half-point to the 30-year fixed rate in the last month.
It could be their last chance.
The couple of weeks’ rise in mortgage rates can be a call to action for some potential borrowers. Headline news about rising mortgage rates and increasing expectations for the Fed to start tightening policy soon are a signal to get a deal in place, Keith Gumbinger, vice president of HSH.com, told Yahoo Money. Call it a preemptive strike of getting a refinance in place before mortgage rates run any higher.
The rate on 30-year fixed mortgages remained largely flat for the third week in a row, averaging 3.55%, according to Freddie Mac. The 15-year fixed-rate mortgage often a go-to for refinancing edged down to 2.77% this week from 2.80%.
Refinance applications were up 18% for the week ending January 28, according to the Mortgage Bankers Association , after rates began marching higher. The refinance share of mortgage activity increased to 57.3% of total applications from 55.8% the previous week.
There has likely been some recent volatility in application counts due to holiday-impacted weeks, as well as from borrowers trying to secure a refinance before rates go even higher, Joel Kan, the associate vice president of economic industry forecasting at MBA, said in a statement.
They also have more equity to draw.
Fannie Mae High Ltv Refinance Option
Fannie Maes High LTV Refinance Option is a program that caters to borrowers with conventional loans owned by Fannie Mae. LTV stands for loan-to-value ratio, which is the percentage of a homes value that is financed through a mortgage.
Key requirements include having a minimum LTV ratio of 97.01%, and a mortgage that is at least 15 months old.
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How To Request Homeowner Assistance Funds
Homeowner assistance funds are in the process of being distributed to states for redistribution to homeowners. The U.S. Department of the Treasury has provided guidance for states to use in developing their individual HAF plans.
You will request funds from your state after your states HAF plan has been approved and its system is up and running. Meanwhile, the National Council of State Housing Agencies Homeowner Assistance Fund webpage features a map showing the status of each states HAF to date.
Refinance Program Options For Seniors
Employment income is not a requirement to get a mortgage, and lenders arent allowed to discriminate based on an applicants age . So, you can still qualify for a mortgage if youre over the age of 60 or retired.
Along with Social Security income, lenders will count distributions from retirement accounts, such as 401s and Roth IRAs, as long as their calculations show that this income will be available for at least three years after closing.
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Congress Mortgage Relief Programs
Homeowners who have experienced financial hardship during the pandemic have a few options for mortgage relief.
To help borrowers struggling with mortgage payments due to unemployment or illness, Congress enacted certain mortgage stimulus programs as part of the CARES Act.
Many of these assistance programs have been extended into 2021 to help those who are still struggling financially.
If you find yourself in need of financial assistance, current options include:
What Are The Risks Of Refinancing
Although there are many benefits to refinancing, it isnt right for everyone. As with any financial transaction, youll want to make sure the math works in your favor.
Normally, youll be charged closing costs to refinance. These costs can often be folded into your new mortgage, but doing so will add to your monthly payments. Therefore, youll want to fully understand these charges and take them into account to ensure that your monthly savings from a refinance will more than offset the costs.
To calculate how long it will take before the monthly savings from your new mortgage outweighs its closing costs , use a refinance calculator and enter the basic information about your current mortgage and the new mortgage.
If you find that the break-even point on your new mortgage is 7 years, but you only plan on staying in your house for another 5 years, then refinancing might actually be more costly than just keeping your current mortgage, even if its interest rate is higher.
Related: Why you should get a 15-year mortgage and why you shouldnt.
Youll also want to keep the length of your new mortgage in mind. All mortgages are designed so that youre paying more interest than principal in the first half of the mortgage. That means if youre starting a new mortgage with a refinance, youll be paying the bulk of the interest again at the top after previously paying the bulk of the interest in the first years of your old mortgage.
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How To Apply For Either Option
The Program Cuts The Cost Of A Refi
Refinancing costs vary by state and lender, but its not unusual to pay 3% or more of the amount you owe one your house in refinance fees: “closing costs.”
If you qualify for the FHFAs new program, your lender must provide a credit of up to $500 for an appraisal if you need one and waive the usual 0.5% fee for borrowers with loan balances at or below $300,000.
But to be eligible, you must not have missed a payment in the past six months and have no more than one missed payment in the past 12 months.
Plus, you must meet specific requirements related to how much debt you’re carrying and how much equity you have in your home.
Finally, you can’t have a credit score lower than 620. If youre not sure if yours will make the cut, its easy to peek at your credit score for free.
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How Are These New Refi Options Different
Once a lender decides to offer the Refi Now option, theyll need to offer the benefits to anyone who qualifies. This includes a guaranteed interest rate reduction as well as a guaranteed reduction in the monthly payment.
Benefits that set the Refi Now and Refi Possible programs apart from traditional refinance loans include that you:
- Will get a reduction of at least 0.50 percentage points in your interest rate
- Will see a reduction of at least $50 in your monthly mortgage payment
- Will get a maximum $500 lender credit applied towards an appraisal if you dont qualify for an appraisal waiver
- Wont have to pay the 0.50 percentage point Adverse Market Fee if your loan balance is $300,000 or lower
Refinancing With A High Loan
Mortgage relief programs flip the rules around.
Instead of staying under a maximum LTV ratio, your loan must be at or above a minimum LTV ratio.
For instance, Fannie Maes HIRO program and Freddie Macs FMERR program could only be used with an LTV at or above 97.01 percent. That means the homeowner could only refinance if they had 3 percent equity or less in the home.
The good news is, home equity has skyrocketed as bidding wars force home values up across the nation. That means current homeowners even those who arent planning to sell have seen their equity increase.
The result is that high-LTVs are no longer an issue for many Americans. With home values up, many owners are refi eligible they just dont know it yet.
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What Replaced Harp Now That Its Gone
When HARP was discontinued in 2018, two programs replaced it: Fannie Maes high loan-to-value refinance option and Freddie Macs enhanced relief refinance.
Fannie Mae and Freddie Mac are government-sponsored enterprises that buy mortgages and resell them at more affordable rates to homebuyers. These two particular programs benefit homeowners who already have mortgages through Fannie Mae and Freddie Mac, and theyre intended for people with high loan-to-value, or LTV, ratios. What this means is that, of the homes appraised value, the homeowner owns only a small portion of it. Lenders use LTV to determine how much of a risk it would be to lend to someone.
Is There A Congress Mortgage Stimulus Program
With Covid-era relief efforts winding down, some Congress mortgage stimulus programs are coming to a close.
Fortunately, homeowners who need to lower their mortgage payments are not out of options.
Millions of homeowners are still refinance eligible. And with a wide variety of mortgage programs available, even those with little or no equity might qualify for a lower rate and cheaper monthly payment.
> Related: The best way to refinance your mortgage
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Take Advantage Of Historically Low Interest Rates With Refinance Relief Programs
These new programs are important because mortgage rates have plunged in the last 18 months. The 30-year-fixed mortgage rate hit its lowest level ever in early January 2021, bottoming out at 2.65%.
Even as of October 2021, 30-year fixed-rate mortgage rates hovered just below or slightly above 3%.
Todays Mortgage Interest Rates: December 16, 2021
|Weekly Rate Trends|
Copyright 2021 Freddie Mac. Averages are based on conforming mortgages with 20% down.
Homeowners with home values that were too low relative to their mortgage balances were barred from taking advantage of these historically low interest rates and from the substantial monthly savings that came with them.
Thats where HIRO and FMERR come in. Both programs allowed homeowners to refinance their Fannie or Freddie mortgages, even if their homes were underwater, or higher than their homes market value. Though these relief programs are currently paused, many homeowners are finding they can still refinance to a lower payment thanks to rising equity and low interest rates.
About Mortgage Grants And Schemes
A mortgage grant is a monetary award that doesnt have to be repaid. In fact, its this lack of repayment that distinguishes them from loans. The awarded funds can only be used for the initial intended purpose, and as such, homeowners will need to provide updates on occasion to show how the granted funds have been used.
The applications for mortgage grants are somewhat complicated and in-depth. Missing pieces of information or providing inaccurate data could lead to a denied application. However, with millions of dollars in grant funds made available every year, its still possible to get approved. Certain qualifications need to be met, such as being a minority or having low income.
Schemes can involve monetary awards that dont need to be paid back, as well as specialized programs that make housing much more affordable, whether its through discounted housing prices or easier mortgage payment options.
The programs that are offered are typically state- and locally-based. The following are just some of the mortgage grant and scheme programs available out there for those who are in need and qualify.
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State And Federal Assistance Programs Can Help You Keep Your Home
Feeling overwhelmed by your mortgage payment? It may be that the total cost of homeownershipfrom your house payments to utilities to insurance costswasnt quite clear to you before you took the plunge. Or perhaps you suffered a job loss or an unexpected family medical emergency. No matter the reason, falling behind on your mortgage payments is always a scary prospect.
So, what do you do when you just cant make ends meet? Before doing something drastic, like skipping out on your loan payments, consider getting some help. There are plenty of government mortgage assistance programs that can help you get back on your feet. Lets take a look.
Refinancing Fannie Mae And Freddie Mac Loans
Fannie Mae and Freddie Mac are rolling out programs to make refinances more accessible to lower-income borrowers. These programs will:
- Provide a savings of at least $50 per month
- Provide an interest reduction of at least 0.5%
- Provide a credit of up to $500 to cover an appraisal if the borrower doesn’t qualify for an appraisal waiver
To qualify, borrowers must:
- Have a loan backed by Fannie Mae or Freddie Mac
- Have a single-family, owner-occupied home
- Have an income at or below 80% of the area median income
- Not have missed a payment in the past six months
- Not have missed more than one payment in the past 12 months
- Not have a loan-to-value ratio above 97%
- Not have a debt-to-income ratio above 65%
- Have a FICO score of 620 or higher
Fannie Mae’s program, called RefiNow, started on June 5, 2021. Freddie Mac’s program, called Refi Possible, is starting in late August 2021.
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