If you’ve been paying your mortgage since the crash and kept up solid payments, the Obama Refinance Program may be the solution you’ve been seeking. When it comes to avoiding foreclosure when payments are being met, this is a great solution to your problem. Here are some things you should know before you begin the process.
Before Applying for the Obama Refinance Program
One of the main requirements for the program is a clean on-time payment history. Staying on top of your mortgage even when the chips are down, shows you that you’re responsible. Handling your payments shows lenders that you can take on things with grace. This sets you apart from other homeowners who’ve fallen through the cracks in a mortgage that leads to a tremendous amount of debt. Also, you want to earn the trust of your lender to build an even better future relationship.
What FHA Requirements Are Similar to Obama’s Plan?
Whether you have a conventional or federal loan, you want the refinance to reflect your current situation. It’s important to be realistic and better your financial strategy. One thing they have in common is both federally based loans, and Obama’s refinance program is the residency requirement. If you decide to go through either method, you need to be living in the home that you intend to refinance. Become aware of certain residency rules that your state proclaims.
Starting the Refinance Process?
In order to become eligible for Obama’s program, you need to include information about your current loan, a second mortgage (if you have one), and other forms of credit. Lenders want to know your credit score. A history of your credit payments and credit cards may be requested as well. Be as thorough as possible when it comes to the information on your tax documents. Lenders may inquire certain details before they approve the refinance. Remember, they have the final say, whether or not you meet the requirements.
Keep An Eye on Your Loan to Value Ratio
This is quite risky especially if your loan to value ratio is high. Lenders need this as low as possible in case stuff starts hitting the fan. It’s a preventative measure in case of defaulting or even foreclosing on the property. Remember, this not only hurts their chances of recouping the costs, but it shows up on your record. You will be hard pressed to find another lender when you have something like that on your credit record. Make sure that you put a budget on your spending before refinancing. Build more equity and credit so you’re able to refinance at a rate you deem acceptable.
Measure all of the opportunities you have before applying for the Obama Refinance Program. This may be a solid option in your Sallie Mae or Freddie Mac loan. Be sure to do your research online and consult different refinance lenders to help you get started.