Fannie Mae, Freddie Mac Launch RefiNow & Refi Possible
In early May, Freddie Mac and Fannie Mae released refinance programs for low-income borrowers — allowing them to benefit from today’s historically incredible interest rates. Those who want to apply for the Freddie Mac product, called Refi Possible, will need to wait until August 30th for its launch. However, Fannie Mae rolled out its product, RefiNow, on June 5th and is currently accepting applications.
Through these programs, homeowners will typically be able to save $1200 to $3000 per year on their mortgages.
Who can use Freddie Mac Refi Possible or Fannie Mae RefiNow?
Here are three essential requirements to take advantage of these federal assistance programs:
Either Freddie Mac or Fannie Mae must be your current mortgage holder.
The refinance must allow your monthly payment and interest rate both to drop.
You must meet certain parameters related to your payment history, income, and credit score. See below for further details.
No option for a cash-out refi
Many refinance programs allow borrowers the opportunity to get money back that they have built up in home equity. That is not the case with Refi Possible or RefiNow. The maximum amount you could get back if additional funds result from the refinance is $250.
Qualifying for RefiNow (Fannie Mae) or Refi Possible (Freddie Mac)
Here are fuller requirements to qualify for these programs:
Payment history: You cannot have made more than a single 30-day late payment within the past twelve months and must have sent in all payments on time for the past six months.
Credit score: The minimum credit score is 620.
Income: Your income must be at or below 80 percent of the area median income.
LTV: The loan-to-value ratio (LTV) must be at or below 97 percent (95 percent for manufactured homes).
DTI: The maximum debt-to-income ratio (DTI) is 65 percent.
Seasoning: You must have borrowed the current mortgage 1-10 years ago.
Refinancing with the best rate
To understand how amazing the interest rates are and why 2020 and 2021 have been an extended Refinance Boom, the Freddie Mac Primary Mortgage Market Survey (PMMS) is helpful. This tracker of mortgage rates nationwide shows the current averages for 15-year and 30-year fixed-rate mortgages (FRMs) at 2.24 and 2.93 percent, respectively.
Do you want to cut the expense of your mortgage? Whether you qualify for these programs or not, you may be able to save thousands with a refinance. At Best Advantage Mortgage (BAM), we get to know you and your goals – so you save money where it matters most. Apply now.