Economic Stimulus & Refi Plus

Refinancing a home these days has been a more difficult task than what we've seen over the last several years when homes were treated much like an ATM machine.

The challenges we are seeing lately are tighter underwriting guidelines which go back to more sound lending practices. Lenders are tightening the credit score requirements to a 620 FICO or better and in many cases as high as 640 before they will lend. If you are not sure what your credit score is, check out your score at Equifax.com.

Another big problem we've seen is house values falling. Although we are seeing a stabilization started to take hold, house values in many cases are now less than what the mortgage balances are. In other cases, the values have fallen and left very little equity in the homes. Homeowners want to take advantage of lower interest rates, but have been unable to do so up until now.

Under the Stimulus package, Fannie Mae brought about a new program called Refi Plus. This new program is allowing homeowners, who have demonstrated "good pay histories on their mortgages but have been unable to refinance due to a decline in home values", take advantage of the lower rates.

The program is brand new and slated to roll out on April 6th. There are still many questions we are working through with the lenders, however, opportunity is right around the corner so they say.

This program is NOT a "BAIL OUT" for people who's values are upside down or for individuals who may be facing foreclosure.

More to come.