While basic understanding of the "book smarts" within the mortgage industry will help you understand specific terminology, loan programs, and features, there is so much more you will need to know in order to make an informed financial decision.
My approach to providing education strives to further your understanding beyond the "book smarts" of the mortgage industry, and learn the valuable "street smarts" that will help you achieve the best possible results, while avoiding the most common pitfalls that non-informed Borrowers and Real Estate Professionals have experienced.
The Mortgage Street Smarts of the DU Refi Plus Loan Program (and Freddie Mac Open Access Relief Loan Program):
On March 4, 2009, the Department of the Treasury announced details of the new "Making Home Affordable" plan, which has subsequently helped millions of Homeowners across the Country to take advantage of the today's low interest rates. The specific loan programs are called "Refi Plus" (Fannie Mae)and "Open Access Relief" (Freddie Mac). Both programs seek to help Borrower's who have previously been unable to refinance solely because of a reduction in the value of their homes (which is obviously something beyond the Homeowner's control). Although there are specific details within the program, a summary is listed below for you to reference:
- Maximum Loan-to-Value (LTV) has been increased to 105%
- For example: if your home is worth $100,000, your new 1st mortgage can be as high as $105,000
- Technically, these programs can go as high as 125% LTV (but no Lender is currently offering a loan with that much negative equity)
- There is no maximum Combined-Loan-to-Value (CLTV), which means that if you also have a 2nd mortgage (or Home Equity Line of Credit) this will not prevent you from getting a new loan
- For example: if your home is worth $100,000, and you currently owe $102,000 on a 1st mortgage, and $75,000 on a 2nd mortgage, you can still qualify for a new 1st mortgage (your current 2nd mortgage would not be affected)!
- Borrower Benefits: The new loan must accomplish one of the following benefits to be eligible:
- Reduction in the interest rate of the current 1st mortgage
- Replacement of an existing ARM, Interest-Only, and/or Balloon/Reset "time-bomb" mortgage
- Reduction in loan term (i.e. from 30 year to 15 year)
- Eligible Properties:
- Primary Residences (1-4 units)
- Second Homes (1 unit)
- Investment Properties (1-4 units)
- Loan Amounts up to $729,750 (varies by county)
- Private Mortgage Insurance (PMI)
- If you do not currently have PMI on your loan, you will not be required to obtain PMI for your new loan!
- If you currently have PMI on your loan, you will need to obtain PMI on your new loan.
- Restrictions:
- You can only payoff your existing 1st mortgage with this program (if you currently have a 2nd mortgage, you may not combine the 2 mortgages into one new loan).
- Cash-Out is limited to 2% of your new loan amount of $2000 (whichever is less)
- You must provide income documentation and
- Appraisals: In many cases, a new appraisal will not be necessary!
- Credit History
- No minimum credit scores have been identified
- Credit restrictions pertaining to Bankruptcy, Mortgage Delinquencies, and/or Foreclosures will apply
To see if your property is eligible for this limited time program, click here.
For more information on topics like this, please feel free to visit www.MortgageStreetSmarts.com (an educational resource for Borrowers, Real Estate Agents, and Financial Professionals)
To see if you qualify (and to obtain a current market interest rate quote), click here for a secure online loan application form.
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