How Fannie Mae and Freddie Mac Refinances Work

Many people are interested in finding out more information about how a Freddie Mac or Fannie Mae refinances work and whether or not it will work for them. Due to the Obama Administration’s efforts to making homes affordable, they have put a plan into place to help homeowners lower their monthly payments. You might just be eligible for this assistance if your home is guaranteed or owned by Freddie Mac or Fannie Mae. In order to find this out, verify your eligibility, gather appropriate documentation and contact your lender.

Verify Your Eligibility

In order to qualify for a refinance with Freddie Mac or Fannie Mae there are certain requirements you must meet. Even if you meet all of the requirements, there is still no guarantee they will accept you for a refinance, but it doesn‘t hurt to try. Make sure you are up to date with your mortgage payments, as this can act against you. To qualify for a refinance you must own your home, own no more than 4 units and the principal of your mortgage cannot be more than 125% of your homes current value. Check your address online and determine if your address is one of the targeted homes that are eligible for a refinance.

Appropriate Documentation

When applying for a refinance, there are several pieces of documentation that will be required. When applying you will need to have 1 to 2 months of your pay stubs and any other taxable income earned. You will be required to present a copy of your monthly mortgage statement, in addition to any second mortgages or home equity lines of credit.

 The lender will want to see your statements to prove the monthly payments you make and any outstanding account balance. Lastly, you should bring copies of your credit card bills which will show them the balance you are carrying and what is required as a minimum monthly payment.

Contact Your Lender

After preparing all of your documentation, it is now time to contact your lender. Your lender’s contact information should be accessible on your mortgage payment booklet. When you contact you lender be sure to let them know you are interested in applying for the Affordable Home Refinance Program and that your home is owned by Freddie Mac or Fannie Mae.

They are obligated by law to offer you a refinance opportunity so don’t let them fool you. If you have difficulty with your lender or would like to speak with someone else, you should contact a HUD-approved counselor who can be of assistance throughout the process and speak with your lender at your request.

The goal at this time is to keep people in their current homes and work with them to afford their mortgage. There are several programs willing to help you stay in your home in order to avoid a foreclosure which is what has led Freddie Mac and Fannie Mae to slash their refinancing fees. Make sure to inquire with your lender and speak with a HUD approved counselor to discuss all of your options in order to determine what will work best for you.

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