Originally posted by Katie Curnutte at www.zilliow.com
- If the home you want to refinance is your primary residence,
- The loan on your home is controlled by Fannie Mae or Freddie Mac (it must be a conforming loan ” you can call Fannie at 1-800-7FANNIE and Freddie at 1-800-FREDDIE or submit online forms with Fannie and Freddie), and
- If you™re current on your mortgage payments (meaning you haven™t been more than 30 days late on your mortgage in the last 12 months)
- If you have sufficient income to support a new mortgage¦
.. then, you might qualify.
It gets a little more complicated, though: You can™t be too far underwater on your mortgage (owe more than the home™s market value) to qualify for the refinance. You can owe between 80-105% of the current value of your home, but no higher than 105%. (This plan assumes that if you owe less than 80% of your home™s value, you probably can refinance without government assistance.)
Zillow has used its Q4 Real Estate Market Reports to estimate that about one-quarter of Americans with mortgages could be eligible. That number is probably smaller than our estimate, though, because we can™t see who has Fannie/Freddie-backed mortgages.
What Do I Need to Provide?
If you think you might qualify to refinance, you™ll need to give the following documents to your mortgage lender:
- Your monthly gross (before taxes) income of your household, including recent pay stubs.
- Your last income tax return.
- Information about any second mortgage on the house (you can only refinance your first mortgage under the plan, but having a second mortgage won™t automatically exclude you).
- Account balances and minimum monthly payments due on all your credit cards.
- Account balances and minimum monthly payments for all your other debts, like student loans or car loans.
How Will They Decide What My Home is Worth Today?
Official word on how your home will be valued for the refinance portion of the Obama housing plan hasn™t been released yet. It™s possible that lenders are expected to use their traditional procedures, but it hasn™t been spelled out in the documents. One lender has some ideas how they will arrive at 105%.
When Will This Help Me?
When it comes to refinancing under the Making Home Affordable plan, patience is going to be a virtue. With so many homeowners in some sort of distress (one in six American homeowners has negative equity, and foreclosures and home values fell 11.6% nationwide last year), there is likely to be a flood of applications and queries for lenders.
What If I Don™t Qualify to Refinance?
Don™t lose heart ” you might qualify for a loan modification under the plan. Another blog post with the ins and outs is coming soon.
In the meantime, here are some good resources:
If you, or someone you know is considering Buying or Selling a Home in Columbus, Ohio please contact The Opland Group. We offer professional real estate advice and look forward to helping you achieve your real estate goals!
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