Fannie Mae and Freddie Mac own half of the loans in the United States. Consequently, these quasi-government owned corporations have developed some fantastic opportunities for those who are lucky enough to have their mortgages owned by them.If you are doing a Palmdale mortgage refinance, our experts tips can help you.

Where as if your loan was not owned by either of these companies, you would have several restrictions placed on your loan by the lending institutions, the loans of these two companies have far more lenient guidelines. So much so that at times their leniency can be the difference between being able to complete a loan refinance or not.

For example through Fannie Mae’s loan program DU REFI PLUS and through Freddie Mac’s loan program OPEN ACCESS, if your home is underwater; if you owe more than your home is presently worth, you can do a refinance Palmdale your home loan and enjoy the historically low interest rates now being offered in the marketplace.

Whereas the best a borrower, who has a loan that is not a Fannie Mae or Freddie Mac loan, can do is to borrower up to 96.5% of their home’s value through the FHA loan program. DU REFI PLUS and OPEN ACCESS will allow a borrower to take out a loan that is up to 105% of their home’s value. For example if a borrower’s total loan amount equals $105,000 and their home is worth $100,000, then a refinance Saugus is possible under these two loan programs.

Furthermore, the fees involved with these loans are much lower than refinancing through convnetional means. In some cases several percentage points lower. Plus if a borrower using a conventional loan tries to refinance their home loan, and owes over 80% of their home’s value, there will invariably be an extra mortgage insurance payment added to the regular monthly payment. That payment will need to be paid each and every month that the new loan exists.

In many ways the DU REFI PLUS is even more generous than the OPEN ACCESS program. For example just recently DU REFI PLUS rolled out a new loan option so that a borrower can actually borrow up to 125% of their home’s value. This will be a huge benefit to a large group of borrowers who are owing between 105% and 125% of their home’s value and were up until now rejected from the opportunity to refinance.

Usually as a borrower borrows a greater percentage of their home’s value, the fee to do so increases incrementally. This is certainly the way it is with the conventional loan. Conventional loan fees can run 3% and 4% in some cases depending on the borrowers credit score, which is a very important factor in the amount of fees ultimately added to a loan.

The Mortgage Process

However, even though fees increase on DU REFI PLUS AND OPEN ACCESS loans, they are capped at 1.75% to 2% depending on the lender. This again is a huge difference for those who are fortunate enough to have Freddie Mac or Fannie Mae own their home loan. On a $200,000 loan a 2% fee is $4,000 that must be added to the loan, but a 4% fee from a conventional lender adds $8,000. It is exactly the same loan situation, but one is owned by these two corporations and the other is not.

Furthermore, if you own a second home or an investment property and that property is owned by either corporation, the same lenient guidelines apply. Whereas with Fannie Mae you can borrow up to 105% on an investment property, a loan not owned by Fannie Mae will only be able to refinance if there is 25% equity still remaining. In other words if you own a $100,000 investment property you will only be allowed to borrow up to $75,000. If you owe more you are simply out of luck. With Fannie Mae and Freddie Mac the same 105% loan to home value exists.

You might ask why is the government willing to take the risk involved with allowing a borrower to borrow up to 125% of their home’s value. The reason is simple. If a person can save $200 per month on their home loan, they will spend that money and go out to dinner, or to the movies, or to the grocery store and buy more food. In essence they will help to stimulate the economy. If a million borrowers can benefit from these loan programs the boost to the economy might be significant enough to help jettison out of the recession.

As you can see there are significant opportunities for those whose homes are owned by these two major corporations. Mortgage Rates Palmdale are low and now is the time to do a refinance Palmdale.The way to find out if your home is owned by either you will have to be able to navigate through their websites. If you are really interested in Palmdale mortgage refinance call us or apply here and we at First Priority Financial will be happy to find out for you.Thank You for selecting MortgageConsumer.com