The housing system is still in disarray from 2008’s market crash. President Obama has imposed a refinance plan to help millions of homeowners lower their mortgage rates through modified loans to keep them from losing their house or foreclosing on the property. It was first announced in 2009 as the Making Home Affordable program. Although it does provide hope for homeowners on the verge of losing their property, it does come with conditions. Here are some things to consider regarding Obama refinance.
Do You Have to Be Current On Your mortgage in Obama Refinance?
The simple answer is yes. If you’ve had a mortgage going since 2008 or 2009, a good record definitely helps to qualify for this specific program. Like most refinance plans, your record says everything to any lenders that will let you borrow a certain amount of money. Remember, it’s up to you to create that first great impression and the lender has the final say regarding your plan. A financial adviser will certainly recommend that you stay on time with your mortgage at least a year before you decide to refinance.
What do FHA Loans Have to Do With Your Refinance?
Much like federal loan programs, a primary residency requirement must be fulfilled. If you don’t know the required amount of time to live in your home before refinancing, take a look online or ask your lender directly. If you have a conventional loan, this may seem a bit problematic if you are a brand new homeowner. If you don’t meet this requirement, you’re ineligible for Obama refinance. You may need to get on an entirely new refinance program. Make sure the property you wish to refinance is your primary residence. Otherwise, you’re simply wasting your time by trying to refinance in this method.
What Type of Service Must You Be Under to Qualify?
Of course, there are different loan services out there like Sallie Mae. However, this one requires a Fannie Mae or Fannie Mac loan. You can contact your loan officer if you’re unsure you meet the requirement. Also, you can go to their official sites and find the number to see if you’re eligible. If you’re not on a Fannie Mae or Freddie Mac loan, find out more information online to see how you can process those loans. Also, you’ll see what type of paperwork is required and how your finance plays a part in getting approval.
Is Your Loan to Value Ratio a Bit Too High?
With most lenders, a loan to value ratio above 80% is a bit too risky. Let’s say you’ve used more than 20% of your total house value. This makes your home very hard to resell in case you happen to foreclose due to unforeseen reasons. This will make lenders a bit less susceptible to let you borrow any money. Also, lenders take into your account the amount of credit you have in your home. It’s important to have a good balance in both so you have more of a chance to get refinancing. However, this refinance option is a bit more lenient regarding these factors. Through his Home Affordable program, you’ll have an additional chance to qualify as well as get under solid mortgage rates and stable interest rates. Go to the Home Affordable site to get more details on how you can refinance your mortgage.
What is Involved in the Application Process?
As in all elements of refinancing, there’s a certain process you must fulfill regarding your loans. In Obama refinance, you need information about your current loan, any second mortgage and other forms of credit such as credit cards or personal loans. Additionally, you’ll need to submit your most recent tax documents. It’s important to be as thorough as possible in your information so you can make this process a lot faster. Talk to a loan officer if you’re unsure of what you need to help your loan application go through smoothly.
It’s important to talk to your lender regarding your financial situation and whether this should be a good alternative to any other refinance option. If you’re on a conventional loan, it’s wise to become aware of your state’s primary residency requirements so you don’t become ineligible to apply for Obama refinance. Also, you want to make sure that you don’t have any delinquencies to weed you out of eligibility. If you want to refinance, make sure your mortgage is current 12 months before you begin the process. Build your credit and plan ahead to weigh the best refinance options.