Mortgage rates in 2021 have not swung like Tarzan on a soda run and are holding steady just above historic lows. For anyone whose income may have decreased, though, a refinance to a lower rate (which translates into a lower payment and less interest paid over time) could be tougher. A certain debt-to-income ratio is needed to qualify, and a drop in earnings could topple the apple cart.
That’s why EagleBank Residential Lending is jumping at a new opportunity to help more families gain access to today’s low rate environment. Fannie Mae and Freddie Mac recently banded together to help homeowners earning up to $80,000 a year. Those who may have hesitated to seek a lower interest rate now have a new loan option through banks like EagleBank who offer these loans providing expanded guidelines for debt-to-income ratio requirements.
Freddie Mac and Fannie Mae have adopted these new refinance options for loans to borrowers with incomes at or below 80% of area median income and you may be eligible to take advantage of this program. If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under this refinance option. You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites:
Here are some things to keep in mind:
– The new loan must provide the following benefits to the borrower:
• a reduction in interest rate of at least a half a point (for example, 4% to 3.5%)
• a reduction in the monthly payment of at least $50.00 (that includes principal, interest, and the mortgage insurance payment, if applicable).
– The existing loan must be a conventional mortgage loan already owned by Fannie Mae or Freddie Mac for at least 12 months from the original note date to new loan note date.
– The debt-to-income ratio must be less than or equal to 65%.
– Minimum credit score is 620 is required
– Must have identical borrowers on the new loan as the existing loan (ask a loan officer about any possible exceptions).
– Current loan cannot be subject to recourse of any sort (e.g. foreclosure) and cannot be an existing high loan-to-value refinance loan.
– Conforming loan limits only (up to $548, 250 in the DC area)
– For the loan being refinanced, no 30-day mortgage delinquencies in the most recent six-month period allowed, and no more than one 30-day delinquency in months 7 through 12. (If the borrower has missed payments due to a COVID-19 forbearance, and those payments have been resolved in accordance with the temporary eligibility requirements, then the missed payments are not considered delinquencies for purposes of meeting these payment history requirements).
An EagleBank loan officer can help you determine whether Fannie Mae or Freddie Mac owns your current home loan, and can discuss eligibility for RefiNow or RefiPossible products, or any other mortgage product that may be beneficial to your family. A $500 appraisal credit is also given at settlement to defray the cost of any related property evaluation.
Providing D.C.-area residents with tools that can potentially save them money is important in preserving an equitable housing force. EagleBank hopes to help all homeowners who have a stake in our area. Together, we hope to increase access to safe and stable housing for all, and put homeownership in reach for families across the income spectrum.
To learn more about the new refinance loan options, please contact Maceo who can be reached at MClark@EagleBankCorp.com or 301-850-2655.
Maceo Clark (NMLS# 807001) has extensive experience in the mortgage industry as a community lender and loan originator. He is also a long-time volunteer youth soccer coach, so EagleBank’s partnership with DC United truly hits close to home. His goal as a lender is to provide the best mortgage options and achieve the highest levels of satisfaction for his customers.
As a community bank, EagleBank offers knowledge of Affordable Housing and First-Time Home Buyer resources, as well as refinance services. Contact us at HomeLoans@EagleBankCorp.com.
This is not a commitment to lend. To be eligible, buyer must meet HUD minimum down payment, underwriting and program guidelines. All loan applications are subject to credit and property approval. Annual Percentage Rate (APR), and program, rates, fees, closing costs, terms and conditions are subject to change without notice and may vary depending upon credit history and transaction specifics. Property taxes, flood and/ or property hazard insurance may be required. This information is for educational purposes only and is not to be taken as guidelines or guarantees to improve your credit or financial situation or eligibility to secure a home loan.