Don’t let little or no equity stop you from refinancing.

Your mortgage payments may have been a good fit when you bought your home a few years ago, but things change, and sometimes it’s necessary to refinance. That’s not always easy to do if you’re underwater on your loan though, as traditional refinancing requires some type of equity in your home. We’ve got good news — you may be able to refinance your mortgage even if you owe more than 97% of your home’s value.

The Home Affordable Refinance Program (HARP) has officially expired, but we offer two new refinance loans. To be eligible, you must have an existing Fannie Mae (FNMA) or Freddie Mac (FHLMC) loan. The Fannie Mae High Loan-To-Value Refinance Option (HIRO) is designed to help homeowners refinance into a lower rate and payment — even if you have little or no equity in your home. In most scenarios, no minimum FICO® Score and no max debt-to-income (DTI) is considered. Your note date must be on or after October 1, 2017. Your current loan-to-value (LTV) must be over 97.01% for a single-family primary residence, 90.01% for a second home, and 75.01% for an investment property.

Another option is the Freddie Mac Enhanced Relief Refinance (FMERR). This program is essentially an extension of HARP but with slightly different requirements. With FMERR, you can get a lower interest rate, shorter loan term, or change from an adjustable rate mortgage (ARM) to a fixed-rate mortgage. Like the HIRO, in most scenarios, there’s no minimum credit score and no maximum DTI. Again, your note date must be on or after October 1, 2017, and the same LTVs apply for you to be eligible.

Consider refinancing with either of these programs, and you could reduce your monthly mortgage payment and start building equity.

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Is a higher LTV refinance right for you?

It’s always a good idea to make sure the benefits are worth it. You may want to consider this type of refinancing if you would like to:

  • Have a lower monthly mortgage payment
  • Reduce your interest rate
  • Get a fixed-rate mortgage that won’t change over time
  • Take advantage of shorter terms to build equity faster

Want to know if you qualify for a higher LTV refinance? Reach out to us. If you’re eligible, we can help you jump on today’s low interest rates.

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Frequently asked questions

What costs are required at closing?

Closing costs can be divided into two main categories: the lender and third-parties out of the lender's control. Lender fees include any costs associated with processing your loan, such as prepaid interest,, discount points, origination charge, and any rate lock fees. Third-party fees include fees paid for services performed by parties other than the lender – either imposed by the state or local government, or by the individual vendors that provide the service. They also include pre-payments for taxes and insurance that are placed in an impound or escrow account. Third-party fees include appraisal fees, title service fees, and government recording fees.
Improving your score is not impossible. There are things you can do right now to begin improve your credit score, including:
• Get copies of your credit reports and stay on top of them
• Set up payment reminders and pay your bills on time
• Focus on reducing your debt

Refinancing is usually a much simpler process than buying a home. Typical steps in the process include:
  1. Research the value of your home and check your credit scores.
  2. Gather all needed documents and apply for the refinance.
  3. After your loan is approved, the underwriting process begins—the time for careful review.
  4. Sign your papers and close your loan.
High interest rates bring higher monthly payments and increase the overall interest you’ll pay over the life of your loan. A low interest rate saves you money in both the short and long term. Sometimes a bigger down payment can help you get a lower interest rate. Keep in mind that the money you pay in interest doesn’t ever go toward paying off the principal, so it’s smart to get the lowest interest rate possible and then pay off your house as quickly as you can.
There are many great reasons for refinancing, including:
  • You’d like to lower your interest rate or monthly mortgage payments
  • You need cash, fast
  • You’d like to consolidate debt
  • You’re looking to shorten your payback term
  • You want to switch from a variable-rate to a fixed-rate mortgage to create regular, predictable payments
  • You’d like to get a variable-rate mortgage with better terms
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30-Year Fixed-Rate Refinance Mortgage Example:
The payment on a $225,000 30-year fixed-rate cash out refinance loan at 3.250% with a 70% loan-to-value (LTV) is $979.21 with 2 points due at closing. The Annual Percentage Rate (APR) is 3.520%. This assumes a FICO score of at least 690. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.

30-Year Fixed-Rate Purchase Mortgage Example:
The payment on a $225,000 30-year fixed-rate purchase loan at 3.125% with a 70% loan-to-value (LTV) is $963.84 with 2 points due at closing. The Annual Percentage Rate (APR) is 3.390%. This assumes a FICO score of at least 710. Payment does not include taxes and insurance premiums, which will result in a higher monthly payment. Interest rates and annual percentage rates (APRs) are based on current market rates and are subject to change without notice. Rates offered may be subject to pricing add-ons related to property type, loan amount, LTV, credit score, and other variables. Mortgage insurance may be required for LTV >80%. If mortgage insurance is required, the mortgage insurance may increase the APR and the monthly payment. Stated rate may change or not be available at the time of loan commitment or lock-in.