RefiNow is a government program that helps borrowers with low to moderate incomes in Massachusetts to refinance their mortgages. Over the past year, lower to moderate-income borrowers were less likely to take advantage of the historically low mortgage interest rates for various reasons. In response, Fannie Mae announced a new RefiNow refinance option for qualifying homeowners. This program has made it easier for many homeowners to refinance their mortgages by removing some of the barriers to qualify for a new loan.
RefiNow makes it simple for homeowners with a Fannie Mae-owned mortgage earning at or below 80% area median income (AMI) to refinance at a lower interest rate and thereby reduce their monthly mortgage payment.
Fannie Mae must own the mortgage to be refinanced. Homeowners can check to see if Fannie Mae is the owner of their loan by using the Fannie Mae Loan Lookup Tool at KnowYourOptions.com.
RefiNow allows homeowners to save money on their mortgage interest rate and their monthly mortgage payment. The program also provides a $500 credit from Fannie Mae if an appraisal on the home is required during the refinance process. This credit goes to the homeowner via the lender.
RefiNow at a glance:
- Reduce interest rate
- Reduce closing costs
- Save on fees
- Allows for a minimum credit score of 620
- Participate with higher debt or lower credit score
- More flexibility
- More homeowners will qualify
Why should I refinance my mortgage?
It is a good time to refinance if you find that property values in your area have increased. If your home value has gone up, this creates more equity. If your equity increases, your loan to value ratio improves, which is a key indicator to determine when you should refinance. The RefiNow option allows for a mortgage with a loan to value ratio of up to 97% and a debt-to-income ratio of 65% or less.
If you have improved your credit score since you first took out your mortgage, you may be able to refinance and get a lower rate. Borrowers with higher credit scores typically get more competitive interest rates because they have shown they manage their debt well. In any case, Fannie Mae’s RefiNow program allows for a minimum credit score of 620.
If your interest rate is higher than current market rates, you should review your mortgage to see if refinancing makes sense. We keep hearing rates are at historic lows, and no one wants to miss out. Remember, many factors are considered when determining what interest rate a borrower will get when applying for a home loan. The only way to know for sure is to work with an experienced loan officer who will do an in-depth review of your financial situation.
Whether you want to lower your monthly mortgage payment or adjust the term of your mortgage, a RefiNow mortgage refinance could help you save money. To see if you are eligible for this program, please contact one of our loan officers.
