Q&A: Making Home Affordable Program: Refinance
The making Home Affordable program allows eligible homeowners to refinance or modify their loans to a payment that is more affordable. It is broken into two parts; the Home Affordable Refinance, and the Home Affordable Modification.
The following are common Questions and Answers on the Making Home Affordable Refinance:
Q: I’m current on my mortgage. Will the Home Affordable Refinance help me?
A: 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.
Q: How do I know if I am eligible?
A: You may be eligible if:
- You are the owner of a one to four unit residential property
- The loan on your property is owned or securitized by Fannie Mae or Freddie Mac
- At the time you apply, you are current on your mortgage payments (you haven’t been more than 30-days late in the last 12 months, or never missed a payment if your loan is less then 12 months old).
- You believe the amount you owe on your first mortgage is about the same or slightly less than the current value of your house.
- You have sufficient income to support the new mortgage payments, and
- The refinance improves the long term affordability or stability of your loan.
Q: How do I know if the refinance will improve the long term affordability or stability of my loan?
A: Your lender will give you a “Good Faith Estimate” that includes your new interest rate, mortgage payment and the amount you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, refinancing may not be right for you.
Q: How do I know if my loan is owned or has been securitized by Fannie Mae or Freddie Mac?
A: You should call your mortgage lender or servicer and ask about program.
Both Fannie Mae and Freddie Mac have established toll-free numbers and web submission processes to make this data available.
Fannie Mae
- 1-800-7FANNIE (8am to 8 pm EST)
- www.Fanniemae.com
Freddie Mac
- 1-800-FREDDIE (8am to 8pm EST)
- www.Freddiemac.com
Q: I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?
A: Eligible loans will include those where the first mortgage will not exceed 125% of the current market value of the property.
Q: I have both a first and a second mortgage. Do I still qualify to refinance under Making Home Affordable?
A: As long as the amount due on the first mortgage is less than 125% of the value of the property, borrowers with more than one mortgage may be eligible for a Home Affordable Refinance.
Q: Will refinancing lower my payments?
A: 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 mortgage with payments that are affordable today and sustainable or 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.
Q: What are the interest rate and other terms of this refinance offer?
A: The rate will be based on market rates in effect at the time of the refinance and associated points and fees quoted by the lender.
Q: Will refinancing reduce the amount that I owe on my loan?
A: No. The objective of the Home Affordable Refinance is to help borrowers get into more affordable loans. Refinancing will not reduce the principal amount you owe.
Q: Can I get cash out to pay other debts?
A: No. However, borrowers whose loans are owned or securitized by Fannie Mae may be eligible to finance all closing costs and obtain a small amount of cash through the refinance if there is sufficient equity.
Q: How do I apply for a Home Affordable Refinance?
A: You should call your mortgage servicer or lender and ask about the Home Affordable Refinance application process.
Additionally, borrowers whose loans are owned or securitized by Fannie Mae may also apply through any Fannie Mae approved lender.
Q: What documentation will I need?
A: You will need:
- Information about the monthly gross income of all borrowers on your loan, including recent pay stubs if you receive them or documentation of your 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.
Q: I am delinquent on my mortgage. Will I qualify for a Home Affordable Refinance?
A: No Borrowers who are currently delinquent or have been 30 days overdue more than once during the past 12 months will not qualify.
Q: How long will the Home Affordable Refinance be available?
A: The program expires on June 10, 2010.
WARNING: Beware of Foreclosure Rescue Scams – Help is Free!
- There should never be a fee for assistance with or information about the Making Home Affordable Program.
- Beware of anyone that asks you to pay an upfront fee for counseling or modification service
- Beware of anyone asking you to sign or transfer over the deed to you house in order to “save” your home.
- Never make mortgage payments to anyone other than your mortgage company without their approval.
The Making Home Affordable Program terms and requirements may have changed since this post was written, see: www.makinghomeaffordable.gov for the most current information.
Should you have any questions or need further information,
please don’t hesitate to contact me, (775) 220-1630
Or visit my blog at www.SellingNorthernNV.com
Joshua Talayka
Chase International
Office: 775 850 5900
Toll Free: 877 922 5900
Cell: 775 220 1630
Fax: 775 850 5901
985 Damonte Ranch Pkwy, Ste. 110
Reno, Nevada (NV) 89521
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I’ve been trying for months. The banks keep losing things, then requesting more docs. It’s so frustrating.