Loans owned or guaranteed by Fannie Mae or Freddie Mac may be refinanced for up to 105% of the home's value. Borrowers must be current on their home mortgage payment. May have credit score is as low as 620. Federal website http://makinghomeaffordable.gov explains the refi programs.
Homeowner with a $500,000 loan can save $476 a month by cutting a 6.5% interest rate on a 30 year mortgage to 5%. Can not have more than one 30 day late payment in a 12 month period. If you do not qualify for the above, you should look into http://makinghomeaffordable.gov Borrowers who owe less than 80% of their homes value are not eligible. May be able to use standard refinancing up to $729,750.00 in Los Angeles. The Lender Program is entirely voluntary for Lenders
Check Fannie Mae eligibility at www.fanniemae.com/loanlookup, or call 800-7FANNIE.
Check Freddie Mac eligibility at www.freddiemac.com/lmymortage.com, or call 800-FREDDIE
Freddie Mac requires that your loan be refinanced through your current mortgage holder.
Fannie Mae allows borrowers to shop at other Fannie Mae approved lenders to get a better rate.
Required Information: Current mortgage information; Monthly statements; Recent pay stubs; Income tax forms; and Documentation on all other income or debts.
Fees: Freddie Mac does not allow fees and points of more than $2500.00; Fannie Mae does not limit the amount of fees and points.
Appraisals: Fannie Mae and Freddie Mac have approved computerize appraisal systems that can be used to speed the refinance process. However, Lenders can choose to have the properties appraised by an approved appraiser.
Second Mortgages: Borrowers with second mortgages or home equity lines of credit can participate, but they can't consolidate the two loans into a single mortgage. This means that the holder of a second mortgage would have to voluntarily agree to stay in the second position for repayment.
Credit Scores: Borrowers will generally need a FICO credit score above 700, and at least 740 if they want the best rates.
Financial Ratios: Loan to Value(LTV): Generally, lower interest rates are reserved for those borrowing less than 80% of their homes value. Those borrowing less than 60% will usually get the best rate.
Debt To Income(DTI): Lenders would prefer that your monthly payments do not exceed more than 43% of your gross monthly income.
FHA PURCHASE: Up to $625,000.00 requires 3.5% down payment.