“This new refinance option is designed to help eligible borrowers who have not already refinanced save between $1,200 and $3,000 a year on their mortgage payment.” The Benefits of the New Refi ProgramsĮligible borrowers will see not only savings in their monthly payments but also in some upfront costs. “Last year saw a spike in refinances, but more than 2 million low-income families did not take advantage of the record-low mortgage rates by refinancing,” FHFA Director Mark Calabria said in a statement. This is the main reason why the FHFA decided to make refinancing easier for those who need the extra savings. However, there were millions of lower-income homeowners stuck on the sidelines, unable to refinance. Folks who saw their equity rise (thanks to the hot real estate market) to above the 20% threshold triggered a stop in having to pay mortgage insurance, creating an extra savings on top of a lower interest rate. Last year’s ultra-low mortgage rates set off a refinancing boom, as homeowners applied to lock in lower mortgage rates. “Our goal is to expand access to credit responsibly and make sure we are supporting sustainable homeownership.” The program “creates more equitable opportunities by making it easier for homeowners in lower-income brackets to refinance their mortgage,” said Donna Corley, executive vice president and head of single-family business at Freddie Mac. The new refi program starting this summer promises to save borrowers between $100 and $250 per month. Homeowners strapped for cash could get a helping hand from the Federal Housing Finance Agency (FHFA) after it announced this week a program that will allow existing mortgage borrowers to take advantage of today’s low-interest rates.Įligible borrowers must have mortgages backed by Fannie Mae or Freddie Mac, which covers about 70% of all home loans.
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