RefiNow™ And Refi Possible®: Accessible Refinancing To Lower Your Monthly Payments

Fannie Mae’s RefiNow™ and Freddie Mac’s Refi Possible^® allow low- to middle-income borrowers to refinance their homes even with relatively high debt. This makes these two programs an incredible asset for homeowners looking to improve their financial situation by reducing mortgage payments.

One of the biggest monthly costs most people have is their mortgage payments. Maybe you’re making enough income to cover your mortgage payments, but not much more. If so, you may have previously had a hard time qualifying to refinance and lower your rate.

If your mortgage qualifies, RefiNow™ and Refi Possible^® could help you save money.

RefiNow™ And Refi Possible^® Benefits

Under a directive from the Federal Housing Finance Agency (FHFA), the government-sponsored enterprises Fannie Mae and Freddie Mac have expanded access to refinance options for clients who meet certain low-income thresholds. Here are some of the benefits you can expect to see from these programs.

• Higher debt-to-income ratios can qualify. These loan products allow homeowners with debt-to-income ratios (DTI) of up to 65% to qualify. Even if you have an expensive car loan or other debt, loosened DTI requirements mean you could qualify to refinance at competitive rates.
• You need minimal equity to refinance. You may be able to refinance with as little as 3% equity in your home.
• You may qualify for an appraisal credit. If an appraisal is required to place a value on your home, you’ll receive a $500 credit toward that appraisal.
• There’s less paperwork required from your end. You can verify your income with a pay stub. If you’re self-employed, you may just need 1 year of your personal tax returns.

Homeowners who qualify under this program need to see at least a 0.5% reduction in their interest rate. Their overall mortgage payment also has to decrease.

Check If Your Mortgage Is Eligible For RefiNow™ Or Refi Possible^®

To qualify for one of these programs, Fannie Mae or Freddie Mac must be the investor in your existing loan. If your mortgage is owned or guaranteed by either Fannie Mae or Freddie Mac, you may be eligible.

You can determine whether your mortgage is owned by either Fannie Mae or Freddie Mac by checking the following websites:

• Freddie Mac Loan Lookup Tool
• Fannie Mae Mortgage Lookup Tool

If you’re not sure if your loan qualifies, a Rocket Mortgage^® Home Loan Expert can help you determine your eligibility.

Refi Possible^® And RefiNow™ Guidelines

To qualify for these loan offerings, you’ll need to meet several qualifications.

Borrower Eligibility

As a borrower applying for a refinance, here are the qualifications you can expect to meet.

• You must make no more than the median income in your area. You can check your local area median income limits. Your income will need to be at or below 100% of the area median.
• Your DTI must be 65% or less. This is up from the usual limit of between 43% – 50% for conventional loans.
• You need a good payment history. To be eligible under this option, you’ll need no more than one 30-day late payment in the last year and none in the last 6 months.

Loan Requirements

In addition to meeting the borrower's eligibility, your home loan must meet the following criteria.

• Fannie Mae or Freddie Mac must own your home loan. Use the tools above to check your loan’s eligibility.
• You need at least 3% existing equity in your home. The program is aimed at helping those who maybe haven’t been in their home long or haven’t seen property values rise.
• Your loan must meet certain age requirements. You need to have been in your existing mortgage for at least a year.
• You must use this to lower your rate and/or change your term. This loan refinance can only have very limited cash back capped at $250.

Property Eligibility

To qualify, there are a few restrictions on the type and use of the property being refinanced.

• The home must be your primary residence. This type of refinance isn’t meant for a second home or rental property.
• You must be refinancing a one-unit primary residence. Residences with more than one unit are ineligible under this loan option. However, condo projects, co-ops and planned unit developments don’t have to undergo the usual review process during the refinancing.

This type of refinance has specific requirements, but the process is designed to be fairly easy on applicants. If you’re not sure whether this is the mortgage option for you, feel free to speak with one of our Home Loan Experts about your situation.

The Bottom Line: RefiNow™ And Refi Possible^® Let More Homeowners Lower Their Mortgage Payments

RefiNow™ and Refi Possible^® open up refinancing to borrowers who qualified for a mortgage with Fannie Mae or Freddie Mac but might not meet DTI requirements for a traditional refinance. With a 65% DTI maximum, this option is intended to remove that barrier.

These programs have huge benefits, including decreased monthly payments, easier documentation requirements and a $500 appraisal credit.

Ready to explore your options for refinancing your home? Begin the refinance approval process or give us a call at (833) 326-6018.