How to Refinance Your Mortgage and Lower Payments –Obama Administration Program

‘Home Affordable Refinance’ is a new program where you can refinance your house to take advantage of the low interest rates. Are you current on your payments? Is the value of your house less than your mortgage? Do you have a variable rate mortgage? Are you making interest only or balloon payments? If yes, here are the details to refinance your mortgage with this program.

Difficulty: Moderate

Instructions

1. Eligibility to Refinance Your Mortgage to a Lower Interest Rate
   
   • You own the home.
   • Fannie Mae or Freddie Mac owns or securitized the loan. Here is how to determine this criteria.
   For Fannie Mae,
   1-800-732-6653
   www.fanniemae.com/loanlookup
   Freddie Mac
   1-800-373-3353
   www.freddiemac.com/mymortgage
   • You are current on your mortgage payments.
   • The amount you owe on your first mortgage is less than the current value of your house.
   • You will be able to afford the new mortgage payments.
   • The lower monthly payments will improve the long term affordability of your mortgage.

2. Application Process to Refinance Your Mortgage
   
   • Contact your mortgage lender to discuss the ‘Home Affordable Refinance’ application process.
   • Most banks and mortgage brokers are approved to work with Fannie Mae and Freddie Mac.
   • As of April 4, 2009, borrowers who have loans that are owned or securitized by Fannie Mae may also apply through any Fannie Mae approved lender.
   • Ask the lender you choose if it is authorized to provide a Home Affordable Refinance.

3. Necessary Documents for Refinancing Your Mortgage
   
   • Gather recent pay stubs for all borrowers on the home mortgage loan.
   • Have you last year’s income tax return available.
   • Pull together information on any home equity loan or second mortgage on the house.
   • Get printouts for bank account balances.
   • Know the credit card provider, account number, and minimum payment due for all active credit card accounts.
   • Have documentation with account number, balance, and monthly payments on other debts such as student loans and car loans.

4. Mortgage Interest Rates
   
   • The interest rate to refinance your mortgage is based on market rates in effect at the time of the refinance.
   • Ask for a ‘Good Faith Estimate’ from the lender showing any associated points and fees.
   • Interest rates will vary across lenders and over time so do some research before deciding on the lender to refinance your mortgage with.
   • Mortgage loans refinanced under this program will have no prepayment penalties or balloon payments.

Tips & Warnings

• The ‘Home Affordable Refinance’ program is available through June 10, 2010. Your refinance transaction must be closed and funded on or before that date. Take advantage of this new program to refinance your mortgage, take advantage of the lower interest rates, and lower your payment.

Resources

• How to Avoid Foreclosure With The 'Home Affordable Modification' Program

[georgelarson]

on 6/28/2009 UPDATE: Wanted to let everyone know that someone I know just finalized this transaction and received a finance rate of 2%, no closing costs, and will save $280 per month. THIS WORKS!!!!

[momtchr]

on 5/8/2009 Much needed info and great tips. Thanks!

[tracysmith159]

on 5/8/2009 wonderful tips on refinacne your mortgage. I just bought my home and only have 5 1/2 percent interest. So I ended up paying only $100 more then rent a month and that includes property tax and insurance. Great time to buy or Refinance.

[autumn1234567]

on 4/21/2009 Really good tips on how to refinance your morgage and lower payments. I'm all about that! 5*

[kittykat3]

on 4/4/2009 These are excellent tips to help you refinance your mortgage and lower payments. 5*