About Government Refinance and Home Purchase Programs

Fannie Mae reportedly has removed its “ability to pay” requirements from the HARP 2.0 guidelines. That means that families that have suffered from reduced income over the last few years might be able to qualify for the HARP 2.0 program. The program will still require no recent 30 day late payments on mortgages but the income qualifying requirement that tripped up so many people may be going away. This change is especially good news for borrowers who are self employed and have had trouble proving income in recent years. Here is an excerpt from a recent HousingWire article on the subject:

Lenders are no longer required to determine a borrower’s ability to repay a loan when underwriting mortgages for inclusion in Fannie Mae’s HARP 2.0 refinancing channel.

Barclays Capital made that conclusion in its securitized products research report Wednesday.

Barclays said Fannie Mae is adjusting its seller guidelines for HARP 2.0 after discovering the “borrower ability to pay clause” is preventing a large chunk of underwater mortgages from entering the program.

Under the changes, the ability-to-pay clause is no longer considered an underwriting requirement for Fannie’s HARP 2.0 program. Instead, Fannie Mae now stipulates that no debt-to-income calculation is required for these refinancings as long as the borrower’s payment does not increase by more than 20%, according to Barclays Capital.

While the HARP 2.0 program won’t be fully operational for a month or two please contact us in the sidebar now to see if you can qualify for it or another government-backed refinance program.

With interest rates near record lows and new government-backed refinance programs being announced many Americans have considered looking in to a refinance. If you are among those people thinking about looking into a refinance, getting started in December has some practical advantages. The most important of these advantages is quite simple: shorter lines. Because of all the distractions from the holidays fewer refinances tend to be originated in December. The result is that the wait times for things like processing and underwriting tend to be much shorter. Starting the refinance process in December and closing the new loan in January is a great way to save time and get extra attention during your refinance process.

Contact us in the sidebar today to learn more about available programs, get an estimate, and possibly get the ball rolling for a January refinance.

The wave of bad economic news from Europe has served to help keep mortgage interest rates near record lows here in the US. As worldwide investors seek safe havens for their money the yield on the 10 year treasury note has remained low which in turn is keeping mortgage interest rates stunningly low by historic standards.

Contact us in the sidebar to see which government-backed refinance programs can best help your family.