Sometimes the question isn’t whether or not to sell your home, but rather should you refinance your mortgage to make life more affordable in your current situation. Our good friend Scott Fournier of Integrity Home Mortgage offers these suggestions based on some of the new laws that have been established recently:

Conventional loans (not government, not FHA, not VA, not USDA)

If your loan is currently serviced by Fannie Mae (go here to check https://www.knowyouroptions.com/loanlookup) and you closed by or before May 31, 2009, there may be options to refinance. With little equity, no equity or are even upside down on your mortgage, the HARP program may offer a solution. You should consider looking into this if your interest rate is above 5%.

If your loan is NOT currently serviced by Fannie Mae (same site to check https://www.knowyouroptions.com/loanlookup) consider refinancing only if you feel you have 20% equity or have funds to pay down your loan to have 20% equity. Same threshold here, 5% and above warrants a look.

FHA loans 

If your loan closed on or before May 31, 2009 and can confirm that it was endorsed by FHA prior by May 31, 2009, you have options.  Regardless of whether or not you live there, use the home as a rental property, have equity, or are upside-down, no appraisal is needed. With this program, anyone with a rate above 4.75% should investigate.

If your loan closed on or after May 31, 2009, know that FHA’s mortgage insurance has increased significantly and for this reason, it will not be worth it to refinance unless your interest rate is at or above 5.5%. There is one exception; a 30 year mortgage refinanced to a 15 year mortgage. Reducing the term could lower the rate and keep the mortgage insurance low. An appraisal will be required and you would have to verify that you are not upside down on the home, otherwise very little equity is required. Those with a rate over 4.5% wishing to convert to a 15 year term from a 30 year mortgage should look into it.

VA  & RD- USDA loans

These are the simplest, regardless of when your loan closed or your equity position. Consider refinancing if your rate is above 4.75%, you may be able to save yourself some extra cash.

We hope this helps. If you’d like to talk with Scott, drop us a note and we will get you two in touch. We’ve been working with him for 12 years and he’s simply the best.

Cheers,
Mike