How to qualify for President Obama’s home loan refinance program here in San Diego? that has been a question everyone has been asking recently now that this program is 90 days old. This is the newest effort by the new administration to help families stay in their homes, the program is known as the “Making Home Affordable” program. Did you know you can qualify for this San Diego Home Loan program even if you now owe up to 125% of your property value. The 105% program has been launched by a few lenders for 90 days now, but as of September 1st , the lenders will now start offering this new refinance program for homeowners that owe up to 125% of their property value. I do believe this new home loan program in San Diego will offer some great opportunities to many San Diego homeowners, as they will be able to fix their adjustable rates, and take advantage of todays record low interest rates and save some extra money each month.
But first of all how do you qualify?
If you can answer “yes” to the following four questions then you will be allowed to apply for this program.
- Does Fannie Mae own your current mortgage? not many people know if they do or not. Here is a great link you can use to check if your home is currently owned by Fannie. http://loanlookup.fanniemae.com/loanlookup/ Just fill in the information and if your result comes up as a ”match found” then your loan is currently owned by Fannie Mae.
- Have you paid your mortgage on time each month in the past 12 months, and not being more than 30 days delinquent?
- Is the current loan amount on your mortgage less than $729k? This is the maximum loan amount that will be allowed to qualify for this program.
- Do you owe less than or equal to 125% of your property value? This is another question that many homeowners will probably not have the right answer to. You are free to use sites such as Zillow.com to get a free assesment of your property value, these numbers are sometimes inaccurate, so feel free to contact me and i can get your more accurate data so you can make an informed decision.
What will interest rates be for this program? Good credit scores are essential!
So, if you answered yes to all the aforementioned questions, you are now eligible to apply for this program. So the next question on everyones minds is, so what will the interest rates look like for this program? Well for loan amounts up to 95% loan to value of your property, you will qualify at todays low interest rates of roughly 5% to 5.25% if you have a credit score over 740, but if you have a credit score between 700-739 it will cost you .5% to obtain the same interest rate. The lower your credit scores the higher the cost will be to obtain todays rates. Fannie Mae is having alot of losses these days due to loan delinquencies, so the easiest way for them recoup some of those losses is through added fees like these on all future business ( the lovely government at work). If your loan amount is going to be at 125% of your property value, the add on fee will be 1.5% to obtain an interest rate of 5.25% even with a 720 credit score. If you have a 680 credit score and you need to go to 125% of your property value, this may cost you 2.5% to get an interest rate of 5.25%. Good credit scores are absolutely paramount these days espcially if you want to obtain the best interest rates. I will be discussing how to obtain and keep excellent credit scores over 740 in another posting, but in the meantime feel free to check out my sections on “Credit Education and Improvement” on my website and download my “top ways to improve your credit scores” http://www.michaeladeery.com/index.php?option=com_user&task=links&id=41.
Results so far
I have submitted quite a few of my existing clients into this program to get qualified and at least half of them have funded with interest rates between 4.875% and 5.25%, unfortunately some of them had appraised values come in over 125% due to many new appraisers under the new HVCC ( home evaluation code of conduct ruling) not appraising these homes correctly, so they were unable to qualify, but the jury is still out because the program is only a little over 90 days old. Also, It is taking on average 30-45 days to fund a loan from inception to completion in this current market. But overall the results have been good for this new home loan program for San Diego
Tremendous Benefits
There are some tremendous benefits to this program that must be mentioned. For example, if your existing loan does not have mortgage insuranace and your new loan is now at say 105% of your property value, you will not have to get mortgage insurance on your new loan as this has been waived. But if you did have mortgage insurance on your exisiting loan you will keep the same mortgage insurance premium % as before. Also, There is a possibility that you will not have to do an appraisal on your property if your property has been given a “property waiver” when we run your application through Fannie Maes automated engine. I would venture to say that this will rarely happen but could do so if your loan amount is truly at 82-87% of your property value.
In Conclusion
I do believe that this program will help many homeowners across San Diego, as there are still tons of homeowners out there who will be able to drop their interest rate from 6% down to 5.25% and perhaps even lower on a good market day, and save on average over $200 a month. I have had a few clients who were ready to short sell their homes or were ready to walk away, but now have choose not to, becuase they were able to obtain a great long term fixed rate. If you have any questions regarding this program please do not hesitate to contct me. You can also check out addtional info for this San Diego home loan program on my website at www.michaeladeery.com
Your Mortgage Planner
Michael A.Deery