Loan Refinance Simple Answers to Important Questions

Homeowners in the United States have all asked themselves questions about loan refinance. Whether they are in serious financial trouble or not they all wonder if they could benefit from the governments eagerness to spend taxpayer dollars on loan refinance.

This series of articles seeks to answer in a simple, jargon-free manner to the all-important questions that are on your mind.

Question 1.) I am current with my mortgage payments. Can a refinance under the Home Affordable Refinance Program (HARP) actually help me?

Oh yes. If you are current on your loan payments but want to modify your loan to take advantage of the current lower interest rates but can’t do it because your home has decreased in value you are one of the demographics HARP is specifically targeting. A loan refinance that lowers your interest rate can provide significant savings now and for the entire lifetime of your loan.

If you take advantage of a refinance under HARP, Fannie Mae and Freddie Mac will allow you to modify a loan they provided or guaranteed with mortgage backed securities.

Question 2.) I want a loan refinance but how do I know if am eligible for a HARP loan refinance?

The answer to this question deserves an article of its own but here are five basic requirements.

- The loan or mortgage must be owned or guaranteed by Fannie Mae or Freddie Mac. If you don’t know who owns or guarantees your mortgage check below for how to find out. It does not mean you can’t get a loan refinance if your mortgage is not with Fannie or Freddie just that you won’t get it under the HARP program. However many banks and mortgage providers are willing to provide loan refinances for premium borrowers.

- You are current on your payments. Yes sir, despite what some “experts” might have told you, you DO NOT have to be delinquent in your payments to qualify, in fact that disqualifies you.

- What you owe on your primary mortgage must not be more than 125 percent of the value (today) of your property.

- You must be able to afford to pay the modified monthly payments.

- The loan refinance actually improves your overall and long term financial stability.

Question 3. How do I know if my mortgage is with Fannie or Freddie?

Call your mortgage lender or servicer, which means whoever you pay your monthly payments to and ask about the HARP program. You can also contact Fannie or Freddie by phone or online and find out directly from them:

o Fannie Mae
1-800-7FANNIE (8am to 8pm EST).
www.fanniemae.com/loanlookup

o Freddie Mac
-800-FREDDIE (8am to 8pm EST)
www.freddiemac.com/mymortgage