Home Affordable Refinance Program and 125 Mortgage
ByEarlier this year, the government announced several new obama mortgage programs including the Home Affordable Refinance Program that extends refinancing to borrowers with 125 mortgage alternatives. The Home Affordable Refinance loan enables borrowers to qualify for a 125 refinance that enables homeowners to borrow up to 125% of the properties appraised value. This is not to be confused with the 125% home equity loan that borrowers would use for cash out and debt consolidation for credit card debt. The Affordable Home Refinance Program is a rate and term refinance that does not allow cash out or consolidation. Qualifying borrowers must currently have a Fannie Mae or Freddie Mae home loan that does not exceed $417,000. Borrowers need a 620 credit score and only one 30-day late mortgage payment is allowed with compensating factors. This latest obama mortgage may create an opportunity for millions of homeowners to refinance into a low fixed rate mortgage even if the borrower is upside down on their home loan.
