How do you know if you are qualified for refinancing under the plan?
I have broke it down into several steps that I take for my clients:
- First determine who the original investor of your mortgage was. If Fannie Mae, any lender eligible to origniante refinances under the Affordability & Stability Plan can help you with your refinance. If Freddie Mac, ONLY the current lender servicing your loan can help. If your loan was through any other lender than Fannie Mae or Freddie Mac (examples: a local credit union, a non-conforming or sub-prime lender, etc.) you will not be eligible for the Plan.
- Next we review credit scores and income to determine qualifiying eligibilty and if any additional 'delivery fees' will be required for utilizing the Plan.
- After receiving credit, we make our best attempt, with your help, to determine an estimated value range for your home. Even under the Affordability & Stability Plan, the current value of your home has an impact on your eligibility for the program and the potential fees related to refinancing under the Plan.
- Upon completing these first 3 steps, we will determine the costs/fees of the new loan and the corresponding interest rate. This allows you to determine the potential savings/benefits to you in terms of real numbers.
Points of interest about refinances under the Affordability & Stability Plan
- It DOES NOT allow you to consolidate or roll in a second mortgage. If you have a 2nd mortgage on your home (ie: home equity loan, line of credit, home improvement loan) I suggest calling the lender and asking them if they will subordinate the loan to a new 1st mortgage originated under the Affordability & Stability Plan. If the sum of your first and second mortgage exceed 95% of the new appraised value, you can expect to pay up to 1.5% of your new loan amount in a 'delivery fee' plus normal closing costs.
- Condos - if your current appraised value is requiring you to utilize the Plan and your loan was originally sold to Fannie Mae, you will pay an additional delivery fee of 1.0% of your loan amount.
- Credit Scores - if your loan was sold to Fannie Mae, credit scores have a substantial impact on the fees associated with your loan. Additional 'delivery fees' can begin at .25% of your loan amount and go as high as 3.0% of your loan amount.
- Appraised Vaules also have a considerable impact on the fees associated with your loan. If your mortgage amount exceeds 95% of the appraised value you can expect to pay as much as 1.0% of your loan amount in an additional 'delivery fee'. Loan amounts exceeding 105% of the appraised value will be ineligible for refinancing under the Affordability & Stability Plan. In some instances, appraisals may not be necessary. Fannie Mae and Freddie Mac each have their own version of automated property valuations.
For more details regarding the Homeowner Affordability & Stability plan, you can call my office direct at 517-783-1780 or e-mail me at jmykala@fpfc.net
