I would love to refinance, but…..

Posted: October 14, 2011 in Uncategorized
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The questions:  What happens if rates have dropped and I would love to refinance my home?  What if I owe more than my home is worth?  I get calls everyday asking these same questions.  These homeowners have an interest rate in the 5% range or higher, would love to save money, but…..  Have rates dropped? Yes. Have home values dropped?  Yes.  Fannie Mae does have a program called Refi Plus that will allow you to refinance in this situation, but only up to a certain limit.

The solution:  What if our esteemed government released a program that would allow everyone, regardless of appraised value, to do that.  The program could be strict and simple.  Allow homeowners who have not been late on a mortgage payment in the last 12 months, have a DTI (debt to income ratio) less than 45%, and a credit score over 720 to use this program.

The benefits:  Are you kidding?  They are endless but let me name a couple.  First, this program would keep homeowners from giving up and walking away from a home in which they are currently upside down.  Thus, less foreclosures.  Less foreclosures = higher home values.  Second, if I refinance my home I will have more money in my pocket every month. Common sense tells me that the more money I have, the more money I will spend.  Do you think this will help the economy?  Of course it will.

Who’s with me?  We have got to use some common sense in order to get our great country out of this recession.  A simple tweak in the mortgage products that are being offered will do the trick.


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