There are a number of Minnesota refinance mortgage products for homeowners across the state to take advantage of including FHA streamline, HARP 2 for Fannie Mae and Freddie Mac homeowners and of course the traditional conforming refinance.
With so many refinance programs available, a homeowner needs a licensed Minnesota mortgage broker to help them determine which refinance product is right for them and whether or not it makes sense to refinance at today’s Minnesota mortgage rates.
Fannie Mae HARP 2
The Fannie Mae HARP 2 program is designed specifically for Minnesota homeowners who are underwater on their mortgages and are unable to refinance their homes based on traditional refinance programs.
In order to qualify for the Fannie Mae HARP 2 program you loan must be owned by Fannie Mae and you must be current on your mortgage payments. In addition, you must also have less than 80 percent equity in your home.
Fannie Mae HARP 2 programs allow for an unlimited Loan to Value ratio which opens up the doors for a homeowner who owes $200,000 on a property valued at $150,000 to refinance. Even if you have private mortgage insurance, you can transfer your current PMI policy to the new lender.
Freddie Mac HARP 2
The Freddie Mac HARP 2 program is supposed to mirror the Fannie Mae HARP 2 program but may lenders have not jumped fully on board.
For example, in order to qualify for the Freddie Mac HARP 2 loan you can’t exceed 125 percent loan to value. Also, a lot of lenders on the Freddie Mac HARP 2 will not transfer some PMI policies.
Another thing to keep in mind is that Freddie will only allow your current mortgage balance to increase by no more than $5,000 when refinancing. Usually, the $5,000 limit is not an issue but can be in some cases where the borrower wants to buy down the mortgage rate.
In order to qualify for an FHA streamline refinance you must be current on your mortgage obligations and in order to take advantage of the lower fees your loan must be insured by the FHA before June 2009.
An FHA streamline means that the documentation that is usually required to refinance is reduced. For example, there is no need to submit income documentation or assets and you may also qualify for an appraisal waiver.
Traditional Conforming Refinance
A traditional conforming refinance is for homeowners who have more than 80 percent equity in their home and can benefit from refinancing into a lower rate with the possibility of taking cash out.
Those who qualify for a tradition conforming refinance also have the advantage of not carrying Private Mortgage Insurance and getting approved closer to the historic low mortgage rates that you see advertised all over the internet, TV and radio.
What Minnesota Refinance Program Is Right For You?
In order to determine which Minnesota refinance program is right for you, your first step would be to talk to a licensed mortgage broker in Minnesota. Although you may think the options above are clear cut, they are not. Just because you qualify for one of the HARP 2 refinance program, you may want to look at a traditional conforming refinance just to make sure you are receiving the best refinance program.