Fannie Mae Refinance-Plus Program
The recent housing crisis has left many people upside-down in their home value, added to the number of growing foreclosures; it's become very difficult to get mortgage insurance. In the good old days if you did not have 20% to put down on a home purchase, you could take out a second mortgage so that you did not have to pay mortgage insurance. Mortgage insurance companies are going bankrupt during the crisis and the 20% second mortgage option is practically unattainable. So if your home does not have 20% of its value in equity, how do you refinance your home and take advantage of the low mortgage rates? Well, the answer is the Fannie Mae Refinance-plus program which is a government program that is available to people who are upside down. So to keep thing simple we have a quick breakdown of the pros and cons of the program:
- You can qualify if your home is upside down in value, up to 105% of the value of the home. For example, if you owe 200,000 on your home, as long as your home value is not below $ 190,000 you can qualify
- There is no minimum credit score, although it is likely there will be difficulty getting approved if your credit score is below 580
- Mortgage Insurance (MI) is not required on the loan, however if you currently have (MI) you must retain your (MI) on the new loan
- You can subordinate existing second mortgages, which means you keep the existing second mortgage with your existing lender.
- You can not have a second mortgage and combine the two mortgages into one loan.
- If you have mortgage insurance you must keep it.
- The appraised value of your home can still determine the approval.
- Your existing loan must already be with an existing Fannie Mae Lender, otherwise you are ineligible.
- Your credit score determines the rate you receive.
- Only available for refinance mortgages
All in all we find the Fannie Mae Refinance-Plus to be a good program with lots of benefits for people whose home values have dropped. Although there are a lot of determining factors for approval, it's no more difficult that the approval factor with a traditional refinance.
For more information on DU Refinance plus in Idaho click the link