Many homeowners take advantage of today’s low mortgage rates to refinance their mortgage in order to get a lower payment or use equity in their home. Homeowners use refinancing loans on existing mortgages to lower interest rates on loan amounts, move from adjustable rates to fixed rate mortgages, cancel mortgage insurance, and more. While some borrowers may be held back by believing they are not eligible for mortgage refinancing, one of Fannie Mae’s executives says they are not.
To help homeowners cope with financial hardship due to the COVID-19 pandemic, Fannie Mae and Freddie Mac introduced new mortgage programs and requirements that would expand the availability of refinancing for those who would traditionally not have been eligible for it – due to low credit points, insufficient savings on upfront costs, or other obstacles such as low income.
“Many low-income homeowners may feel they cannot afford refinancing, are convinced they are inadequate, or are unaware of the potential monthly savings,” said Katrina Jones, Fannie Mae’s vice president of strategy and impact on racial justice. … “They might be surprised to learn that they have the ability to make monthly home payments more affordable, and they can start by contacting any mortgage lender of their choice to consider refinancing right now.”
If you are curious about what refinancing options are available for your mortgage loan, visit Credible to compare several mortgage lenders at once.
Top 3 Reasons to Consider Refinancing Now
Jones explained that there are three main factors that families should consider when deciding whether to refinance their financial goals, including mortgage refinancing:
- Refinancing rates are low
- They can lower their monthly payments
- Easy to start and see if you are the right fit
“It is important for homeowners to get more information about refinancing and, in particular, about the new program. RefiNowand then call the lender today to find out which option is most appropriate for their family, ”Jones said.
1. Refinancing rates remain low.: Mortgage rates remain close to historic lows. The 30-year fixed-rate mortgage rate will remain at around 3% until the end of 2021 before starting to rise in 2022, according to May data from Fannie Mae Economic and Strategic Research Group. Economic and Housing Outlook…
Homeowners interested in refinancing for a lower interest rate can check validity compare mortgage rates from different lenders and get pre-approval in minutes.
2. Reduce your monthly payments.: Refinancing at a lower interest rate can help reduce your monthly mortgage payment. Fannie Mae and Freddie Mac’s new low-income refinancing program could save borrowers $ 100 to $ 250 a month. according to the Federal Agency for Housing Financing…
Jones explained that refinancing to change the terms of the loan can also help you lower the total amount of interest you pay over the life of the loan, depending on the new terms of the loan.
If your financial goal is to cut monthly payments or save money, you need to use an online mortgage calculator to determine if refinancing your home is a good option. You can go to the Credible website for numbers and an estimated monthly payment.
3. Getting started is easy: It’s easy to see if you are eligible or benefit from a mortgage refinance. Check with the mortgage lenders of your choice to determine the best refinancing option and terms for your situation.
“We are working with our lender partners to mobilize around this new program so that homeowners can take the first step towards getting information through our Know your options “- said Jones. – Ideally, this is exactly what we are trying to do here, but we are working with our partner lenders to get people to take the first step, to get them to make a decision.” to action, get an education, feel comfortable, get information and, just as important, call the lender and start exploring your options. “
How to know if your mortgage should be refinanced
Jones explained that interest rates alone cannot determine whether a borrower should refinance an existing mortgage, and there may be a number of reasons refinancing is a good choice.
“When you refinance a mortgage, you are actually replacing your existing mortgage with a new mortgage loan with new terms that better suit your financial goals,” she said. “If you have a high interest rate mortgage or an adjustable rate loan, or maybe your payments just get unmanageable, refinancing can lower your monthly payments, shorten the term of your loan, or move you to a safer loan.”
Have a financial question but don’t know who to contact? Write to the Safe Money Specialist at email@example.com and your question can be answered by Credible in our Money Expert column.