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Mortgage Refinancing with the New Making Home Affordable Plan

Recently the Obama administration has come out with what is known as the ‘Making Home Affordable Plan’ in which there is a Freddie Mac version and a Fannie Mae version of the plan available. If you happen to have a loan that is serviced by either Fannie Mae or Freddie Mac, then you may be eligible to refinance, even if the loan to value in your home has declined due to the housing crisis.

This is what this new plan is all about. In the event that your home has depreciated in value, and your first mortgage does not exceed 105% of the value of your home, you will be eligible to apply for a refinance through the new plan.

Where you can get your mortgage refinanced depends on who is currently servicing your loan. If it is a Freddie Mac serviced loan, then you will have to go back to your original servicer. If it is a Fanny Mae serviced loan, then you can go to any lender, however you may not know how your loan would be serviced. What you can do in this case is fill out the appropriate forms or go  to your original servicer for more advice.

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One of the largest servicers is Wells Fargo that primarily services Freddie Mac type of loans. If you want to do a little research on your own about these types of loans , you can do a search inquiry online under ” Freddie Mac Refinance Relief Mortgage” or for the Fannie Mae program you can search under ” DU Refi- Plus Program.” You will be be able to get a general idea on how these programs work, and of course it is advisable to contact a professional broker afterward if you are seriously considering moving ahead with a refinance. They will be able to look more closely at your situation, and determine if you qualify. Now if you have a sub-prime loan or a jumbo loan you will not be able to qualify for the program, this is just for Freddie Mac and Fannie Mae loans.

If you have an FHA loan or a VA loan, you will be able to qualify for a “stream line refinance” which is also very popular as there is no appraisal involved. So if you have made your payments on time over the last 12 months and your credit score is above 620, you will be able to qualify for a stream line refinance. Like the Fannie Mae program, with the stream line refinance, you will not be restricted to your original broker, you will be able to get your refinance serviced by any broker you choose.

One of the great advantages with these two plans is that the costs are very reasonable and are relatively concurrent with regular refinance fees involved with standard processes.

One thing to note, is that the rules are constantly changing and evolving every day, so it is important to stay abreast of whats happening in the mortgage refinance world if you want to get the most out of these programs to suit your personal situation.

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