No equity in your home? You may still be eligible to refinance your mortgage!
There’s good news for homeowners who have little to no equity in their home, or may even be upside down in equity. The Federal Housing Finance Agency (FHFA) recently announced changes to the Freddie Mac & Fannie Mae Home Affordable Refinance Programs (HARP) in an effort to attract more eligible borrowers who can benefit from refinancing their mortgage loan.
Here’s how a refinance through the HARP program could benefit a homeowner.
Consider this example:
A home owner has a first mortgage on their property owned by Freddie Mac. When they purchased their home they took a mortgage for 80% of the value and avoided Private Mortgage Insurance (PMI) – 20% down equity is required to avoid PMI. Rates have recently dropped to well below their current rate. The borrower would like to take advantage of today’s lower rates and lower their total monthly payment. The problem is that the value of their property has dropped. They owe $175,000. The value of their home is now only $170,000. In this scenario the homeowner owes 103% of the value (103% Loan to Value or LTV). ALL IS NOT LOST! This borrower can still refinance their mortgage under the expanded HARP guidelines and take advantage of today’s low rates, AND with NO PMI!
As you can see, the expanded HARP guidelines, provides more homeowners with the opportunity to lower their rate and payment through refinancing, potentially saving thousands of dollars over the life of their loan.
Call me today to find out if you’re eligible to take advantage of the expanded HARP program. You could be on your way to a lower rate & payment, and save thousands of dollars over the life of your loan!
