Considering A Refinance?
Considering aRefinance?Four Things Homeowners Should Know and DoYou may be wondering whether it’s the right time to refinance your mortgage loan.If misconceptions and the perceived complexities about the refinance process have made itdifficult for you to make a timely and informed decision, consider these four tips from Freddie Macrefinance experts to help you get started.
1- What to Do: Determine YourRefinance Goals2 - What to Know: Refinancing CanHelp You Save MoneyWhen considering a refinance, our experts suggest thatyou know what you want to achieve.A refinance, commonly called “refi,” is a process inwhich the existing mortgage loan is replaced by anotherloan.REFINANCE CONSIDERATIONSThink about why you’re considering this option:Do you need to makecostly repairs to yourhome?In this case, the new loan is used to pay off the old loan.Often the new loan has better terms, which can resultin a lower interest rate, reduced monthly payments andconsolidated debt — all of which translate to savings foryou.Get Refinancing ResourcesCheck out our refinance resources tounderstand the costs of refinancing andlong-term impacts.Are you looking toexpedite the payoff ofyour home loan?Have you been trackinginterest rates and seean opportunity to loweryour monthly mortgagepayment?Take ActionNailing down the motivation for refinancingwill help you better determine which refinanceoption is best suited to meet your needs.2
3 - What to Know: There AreRefinance Options to Suit Any NeedOnce you’ve identified your refinance goals, you’re astep closer to deciding on an ideal option to meet yourneeds. There are two primary options for refinancing amortgage:NO CASH-OUT REFINANCEThe most common option and may makesense if you’re looking to:Lower your mortgage rate.Move from one mortgage productto another (30-year to15-year fixed).Build equity faster.CASH-OUT REFINANCEYou might consider this option if you’vebuilt up significant equity through yourmonthly payments and your home’sappreciation. It can be used to:Free up cash for a passion project.Consolidate debt.Improve your general financialsituation or your home’s value.3
4 - What to Do: ShopAfter you’ve decided on your goals, taken inventory ofyour financial standing and identified the right refinanceoption, you can start engaging lenders.A common misconception about refinancing is thatyou’re not able to shop around. In fact, our expertsrecommend that you discuss your goals with multiplelenders and treat the initial meeting like an interview.Be prepared with questions and talk openly about whatyou’re looking to achieve.Conversations with lenders may result in a soft inquiryof your credit. Soft inquiries occur when you getpreapproved for a loan and have no impact on yourcredit score.HOW CAN YOU PREPARE FOR A PRODUCTIVE CONVERSATION?Discuss your goalswith multiplelenders.Treat the initialmeeting like aninterview.Be prepared withquestions.Talk openly aboutwhat you want toachieve.4
Next StepsGATHER YOUR DOCUMENTSYou’ll need to have a number of documents onhand to get started, including recent paystubs, theprevious two year’s W2, bank and investment accountstatements, most recent tax returns and a copy of yourhomeowner’s insurance policy, just to name a few.Required documents may vary by lender.SELECT A LENDERThe lender you select will be your point of contactthroughout the process, which can take up to 30-45days to complete. Lenders use a variety of criteria whendeciding to make a loan: Capacity: Ability to pay back the loan. Capital: Readily available money and savings plusinvestments. Collateral: Value of property and other possessions. Credit: Record of paying bills and debt on time.PREPARE FOR THE APPRAISALOnce your loan is approved the lender will schedulean appraisal and the loan will then proceed tounderwriting, which means you’re nearing the close ofthe process.At Freddie Mac our mission is to provide liquidity, stability andaffordability to the U.S. housing market. We’re committedto providing support to borrowers and homeowners like youthroughout the lifecycle of homeownership, including refinance.CLOSING TIMEEvery closing is different but refinances typicallyinclude you, any co-borrowers and a closing agent.This process usually takes place at a title company butdue to social distancing requirements, some agentsare now offering in-home closings. At closing you’rerequired to provide identification — such as a stateissued photo ID — and a valid form of payment for anyclosing costs that aren’t rolled into the loan. You’ll needto review and sign off on the terms of your new loan.Be prepared to spend some time in the office readingthrough your documents — they’re legally binding.CELEBRATEWe understand that the refinance process may seemdaunting, but with a little education and the right tools,it’s possible to make your way through it.For more information, tips and tools on refinance visitMy Home by Freddie Mac .
A refinance, commonly called "refi," is a process in which the existing mortgage loan is replaced by another loan. In this case, the new loan is used to pay off the old loan. Often the new loan has better terms, which can result in a lower interest rate, reduced monthly payments and
The existing loan is not required to be FHA insured. Loan is fully credit qualifying with appraisal. Impac’s FHA Simple Refinance program is a no cash-out refinance of an existing FHA-insured mortgage in which all proceeds are used to pay the existing FHA-insured mortgage lien on the subject property and costs associated with the transaction.File Size: 849KB
refinance, this nonprofit lender participated in several waves of offers to their clients that would allow them to refinance. By working directly with the lender, we were able to identify in the data which households were eligible (preapproved) to refinance. Consistent with the results from the nationally-representative data, we find that a large 4
Refinance Activities (Number of loans) 2Q20 3Q20 Total Refinance 1,522,472 1,758,940 Total High LTV Refinance Option 51 35 5.225 million troubled homeowners helped during conservatorships 41% of loan modifications in 3Q20 reduced borrowers' monthly payments by over 20% Serious delinquency rate jumped to 3.14%
Ten states accounted for over 60 percent of the nation's HARP eligible loans with a refinance incentive as of June 30, 2016. Overview and Eligibility of the Home Affordable Refinance Program (HARP) FHFA Refinance Report Third Quarter 2016 Borrowers completed 15,597 refinances through HARP,
Refinance Net Tangible Benefit: ㆍ A Net Tangible Benefit is required for all refinance transactions. A letter of explanation for the refinance must be included in the loan file. ㆍ A Net Tangible Benefit includes but is not limited to a 5% reduction in PITIA, 5% reduction in DTI, a 2% reduction in rate, a reduced term, and/or
ensures the interest rate will stay the same for the duration of the loan term. Refinance to Cash Out Home Equity If you have at least 20% equity in your home, you can refinance to withdraw home equity. Most financial planners recommend using home equity for something like a home renovation or to responsibly pay down debt.
little or no equity in their homes to refinance their home loans, as long as they are current on their mortgage payments. As of March 2013, more than 2.4 million homeowners have obtained a HARP refinance. This report was prepared by Alexa Strear, Investigative Counsel, and Brian Harris, Investigative Counsel.
Fannie Mae and Freddie Mac suspended the High LTV Refinance option in 2021. The total refinance volume from the inception to the end of the program reached 201 loans. The percentage of borrowers refinancing into shorter term 15-year fixed rate mortgages decreased to 24 percent in December as the difference between 15-and 30-year fixed rate
