NH Refinancing in the Age of Bailouts

NH home owners should take note,

this past week we marked the official start of the Making Home Affordable Refinance Program. We expect that this may help thousands of NH homeowners! The Making Home Affordable program turns a blind eye with respect to falling home values, approving mortgage applications based on borrower payment history and benefit to the NH homeowner. NH mortgage applicants have to meet a few basic qualifications to take advantage of the Making Home Affordable refinance program.

First, your existing NH mortgage must be with either Freddie Mac (Freddie) or Fannie Mae (Fannie). Fortunately, both of these agencies provide a way to check online. It's best to start with Fannie since she's the bigger sister (has more of our NH loans) and because Freddie's online tool requires your ss # (It's okay to enter, I've checked it out and site is secure!).

Next, you must have a perfect mortgage payment history over the last 12 months. Even one payment made 30 days late disqualifies you from participating in the Making Home Affordable program. It is okay, however, if you were 20 days late on your payment and incurred late fees.

And lastly, the balance on your mortgage cannot exceed your home's value by more than 5%. The math formula is (Mortgage Balance) / (Home Value). If the quotient is greater than 1.05 then your loan-to-value exceeds 105% and you are not eligible for Making Home Affordable.

Now, assuming you meet the criteria, there are some noteworthy details of the Making Home Affordable program:

1. If your current NH mortgage doesn't have mortgage insurance, you won't have to pay it after refinancing -- even if your new loan-to-value is greater than 80%. If you do have mortgage insurance presenlty on your loan, there's a plan for that, too ... we're just not sure yet what that plan is! That part of the plan is still in the works but we expect more details shortly. For the most current info on this program head over to our NH mortgage blog and subscribe to our newsletter!
   
2. All NH mortgage refinances under this program (and pretty much every other program available) require income verification -- even if the original mortgage was a stated income loan.
   
3. Second mortgages cannot be paid off through this program. They have to be subordinated. That can be some heavy lifting so make sure that, if you've come this far, you're working with someone who knows what they're doing!
   

Fannie and Freddie each of other guidelines that need to be followed as well. (Links to their sites can be found at www.NHLoanInfo.com)And, of course, their guidelines are different from each other! Like most government programs, their guidleines are created by the pound and all of us are learning as we go.

My recommendation would be to give their guidelines a brief review before talking with a local NH mortgage lender (like me!) so that you have a general understanding. If you have a NH mortgage and you have specific questions about the Making Home Affordable program and your own eligibility, first check to see if Fannie or Freddie is backing your loan. If they are, pick up the phone and call me to plan the next steps. While, the program doesn't end until June 10, 2010 , low NH mortgage rates probably won't last that long.