Refinance Rules are Favorable for Borrowers

Posted on | September 6, 2009 | 1 Comment

Refinance rules published by Fannie Mae and Freddie Mac set the rules and regulations that govern the new Home Affordability Program.  The guidelines show that second homes and small rental properties are also eligible unlike initially stated.  Fannie and Freddie feel that second homes and rental properties are important because they may “help stabilize neighborhoods and housing markets.”  By letting the landlords refinance, it will help reduce the number of evictions in the rental property space.  The Obama Mortgage Bailout Plan has hopes to help between 4 and 5 million homeowners to refinance their current mortgage.

The plan is giving many more home owners the chance to refinance by lessening the requirements to get low mortgage rates.  Before the plan, if your home was worth less than what you currently owe, there was no chance to get a low rate with a refi.  The new plan changes this by allowing home owners to get a low refi rate even if they as much as their house is worth.  Private mortgage insurance (PMI) is also being waived for current home owners.

Both companies continue to point out that the refinance plan is designed for those who have paid their mortgages on time and haven’t been late by 30 days in the last 12 months.  To find out if you are a homeowner who is eligibile to refinance at a lower rates you need to see if your mortgage is backed by Fannie Mae or Freddie Mac.  Go to these websites to find out: http://www.fanniemae.com/homeaffordable or http://www.freddiemac.com/avoidforeclosure.  Saving your home can save you much financial pain in the future.

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