2020 Homeowner Relief Stimulus: Do you Qualify?

If you own a home, chances are high that you’ve been giving some serious consideration to refinancing or seeking some relief from your mortgage payment.

For homeowners who are having trouble making mortgage payments, forbearance rules are still in effect as part of the CARES Act. Regulators haven’t determined when loans backed by Fannie Mae or Freddie Mac will wind down forbearance. Homeowners with loans insured by the Federal Housing Administration are being asked to contact their servicer and request forbearance before Dec. 31.

Senate Majority Leader Mitch McConnell (R-KY) tweeted the announcement of the second bill, saying it comes at an important time for Americans during the holiday season.

“As the American people continue battling the coronavirus this holiday season, they will not be on their own,” he tweeted. “Congress has just reached an agreement. We will pass another rescue package ASAP. More help is on the way.”

If you search for government or Congress mortgage relief, you’ll find results about programs like HARP and FMERR. But the information you see might be misleading. HARP and FMERR, the two major relief programs, are now expired. Even the CARES Act, which offered temporary relief from mortgage payments during COVID, won’t lower your loan costs in the long term. There’s just one large-scale relief program for 2020 that helps homeowners the way HARP and FMERR did.
The Fannie Mae high LTV refinance option (HIRO) is still actively helping homeowners refinance with little or no equity in their homes.

If you are in decent shape with your Mortgage and are able to make payments, you may want to consider refinancing your loan.

Why Refinance?
 
Everyone knows that mortgage rates have fallen to record breaking lows, but did you know about the “adverse market refinance fee” that took effect on Sept. 1 2020? This fee will apply to most loans sold to Fannie Mae and Freddie Mac. As an example, if you’re looking to refinance a $350k mortgage, the fee would cost you an additional $1,750.

Other reasons to refinance:
1. Build your equity
2. Improve your loan terms
3. Get a better interest rate

 
If you are looking to refinance, make sure you check into the following items:

1. Mortgage rates are currently below 3%, which means that almost 18 million home owners can save money by refinancing.
2. Closing costs, which typically account for about 2%-3% of your loan amount should be taken into account.
3. Do you plan on moving? If you’re looking to sell your home in a few years, you may not save enough money with a refinance to make up for what you’ll spend in closing costs.
4. Make sure your credit score is in good shape. You most likely will not be able to score that low interest rate unless your credit score is above 700+.

The bottom line is to make sure you consider all of variables which may impact your unique situation. Here are tips when choosing the best mortgage loan refinancing company

1. Read lender reviews. Happy customers might write great reviews about a company, but folks who have a bad experience will DEFINITELY write a bad review.
2. Shop around online. Make sure to compare reputation, rates, and options before deciding.
3. Shop your rate. Once you have a rate from a company, don’t be afraid to shop it with the competition. If you don’t ask, you won’t get.
4. Know your credit score. A lender will use your credit score one of the main factors in deciding your interest rate. Make sure you’re aware of your credit score and history.