Federal House Financing Agency Announce New Refinance Program for Low-Income Borrowers

The FHFA has announced a new refi program to benefit low income borrowers with single family mortgages. These mortgages will be backed by Fannie Mae and Freddie Mac. This new program is designed to help those who were not in a position to take advantage of 2020’s low rates.

This new option could save borrowers and average of $100-$250 a month on their mortgage but lenders will be required to ensure it saves the borrower at least $50 a month. Simultaneously, the borrower’s interest rate will drop by at least 50 basis points. Lenders will also provide a maximum $500 credit for an appraisal if the borrower is not eligible for an appraisal waiver.

“We look forward to implementing Fannie Mae’s new RefiNow option as soon as possible to ensure all eligible homeowners are able to avail themselves of this money saving opportunity,” says Fannie Mae’s CEO, Hugh Frater.

Qualifications for this program:

  • Must own a GSE-backed mortgage
  • Income must be at or below 80% of the area’s median income
  • Current on mortgage payments for the last 6 months and missing no more than 1 payment in the last year
  • Must not have a mortgage with an LTV ratio greater than 97% and DTI cannot be higher than 65%
  • FICO score must be 620 or higher

The Federal House Financing Agency plans to roll this out to those eligible tentatively beginning this summer.

Contact one of our Loan Officers today to see if you qualify!

Source: FHFA releases new refi option for low-income borrowers – HousingWire

10 Obstacles to Avoid when Closing on Your Home Loan

It takes some time to close even the most straightforward of home loans. These tips offer insight for avoiding pitfalls in between application and closing, so you can help make your loan process as quick and easy as possible!

1. Buying Large Items

Avoid buying things like cars, boats, or other high-end items. Purchases like these can alter your debt-to-income ratio or amount of reserves and may impede your home loan qualification or delay your loan closing. It’s best to wait, review your budget after closing, and make any large purchases you can comfortably afford at that time.

2. Job Change

Quitting your job or changing jobs can have an impact on your home loan qualification. If you plan to make a move to a new position or company, try and hold off until after closing if possible. Most employers will be understanding your need to wait.

3. Credit Change

Avoid opening or closing credit lines. Opening new cards create hard inquiries on your credit report, and closing credit lines may increase your credit utilization. Either one of these could lower your credit score and potentially change your interest rate or home loan qualification.

4. Banking

Avoid changing bank accounts. Underwriters often need bank statements and records in order to approve your loan. Changing banks can mean needing to provide all new statements, and can delay closing.

5. Ignore Questions

Answer all questions from your loan officer. Your loan officer is gathering information and documentation from you that is vital to your home loan closing. Ignoring requests from your loan officer or loan processor could cause closing delays.

6. Delinquencies

Do not pay bills late. Even one late payment can have a major impact on your credit score, and even after the payment has been made it still takes time for your score to rebound. This change in your credit score could have a negative impact on your rates or home loan approval, so it’s very important to be extra vigilant and avoid any late payments prior to closing.

7. Credit Checks

Do not let anyone other than your loan officer run a credit check on you. Many credit checks create hard inquiries on your credit report, which can lower your overall credit score. This can alter your rates and home loan qualification, so it is best to avoid any credit checks until after your home loan has closed.

8. Loans

Do not sign or cosign a loan. Obligating yourself to a different loan prior to closing affects your debt to income ratio. Even cosigning for someone else means you are still liable for the payments on this other loan. The best-case scenario is that your loan officer will need additional documentation for you regarding this new loan, which could delay closing. The worst case is that this new loan would negatively impact your debt to income ratio to the point where you no longer qualify for your home loan!

9. Avoid Large Deposits (Other than your paycheck)

Mortgage Companies are required by federal law to look into large deposits, so any unusual large bank deposits often need a written explanation and this could delay your home loan closing.

10. Payday

Do not take an advance on your salary. This can alter your payment schedule which might hinder your home loan approval.

From application to closing, our entire team at First Home Mortgage will be working our hardest to ensure the best customer service and smoothest process for each and every one of our clients! If you or someone you know is looking to purchase or refinance a home, contact one of our experienced loan officers today!

7 Ways to Avoid Mortgage Sabotage

Homebuyers are often not aware of what can cause issues within the home loan process and potentially sabotage your goals. Read these tips to learn some ways to avoid home mortgage sabotage!

Credit Cards and New Debt

Do not apply for any new credit of any kind! That creditor will show up on your credit report, and the lender will have to verify there is no new outstanding debt. If you are planning to add debt or pay debts off for your home mortgage closing, wait until you have spoken with your Loan Officer. A paid debt may not show on your credit report, and the lender will have to re-verify each creditor’s current balance, which takes time. It may be possible to pay off those debts at closing, with no effect on your approval process. This also includes making any hefty purchases for your new home, such as furniture, appliances, etc.

Do Not Move Cash/Savings Around

Lenders must verify all funds before your home mortgage closing, including the source of those funds. Moving assets around can create a paper trail nightmare. The best advice is to leave everything where it is, even if the purpose of the move is to pool your funds for buying the house. After your accounts have been verified and the lender gives you the “ok”, you can consolidate your accounts if needed.

Large Deposits

All sources of funds for the transaction must be verified. The lender will be looking at any large deposits into your asset accounts (checking, savings, money market, etc.). You should be prepared to document the source-such as a copy of a paycheck, bonus check, money from the sale of an asset, etc.

Do Not Pack Financial Papers

Keep all pages of your tax returns, along with any W-2’s, 1099’s, or K-1’s and any other financial papers from the past two years in a handy place. If you sold a home in the past two years, have your (HUD-1) Settlement Sheet handy. You may have to provide more items, which your Loan Officer will outline.

Become a Paper Hound

Save all pages of all your bank statements and pay stubs from now until closing. The lender will need these while they are processing your home mortgage, so please make sure you keep them handy!


Gifts from relatives are very common in the purchase of a home. However, there are specific ways a gift must be handled to avoid a paper trail nightmare. If you are receiving a gift, hold off on accepting the funds until you have spoken with your Loan Officer. There is a Gift Letter form you may use which provides instructions.

Selling Something?

If you are selling an asset such as a car, an antique, or baseball card collection to come up with the cash for closing, make sure you document the asset. For example, if you purchase a car, obtain the check from the buyer, car title, and a bill of sale. You may need to get a certified appraisal for the item.

When in doubt, always consult your Loan Officer. They will help guide you through the home mortgage process and answer any questions you might have along the way. Are you looking to purchase a home? Reach out to one of our Loan Officers today! And for more information on what you should avoid during the home mortgage loan process, click here.

What is LTV and Why is It Important?

When researching the home buying and lending process, odds are you’ve encountered the acronym LTV at some point. But what does LTV mean and why does it matter? Read on to find out!

What is LTV?

LTV stands for loan-to-value ratio. Expressed as a percentage, LTV is the difference between the mortgage amount and the market value of a property. This compares the size of your loan to the value of the home you’re purchasing.

Why is it Important?

A loan-to-value ratio is very important to your lender because it represents how risky your loan is to them. The more money you borrow compared to the value of the home, the riskier the loan is to your lender because they have more money at risk if you were to default on the loan. The lower your loan-to-value, the less risky it is to a lender. Therefore, a lower LTV can improve your chances of getting a lower interest rate; conversely, a higher LTV may result in a higher rate.

How to Calculate It

A loan-to-value ratio is easy to calculate. Simply divide the loan amount by the purchase price or, in the case of refinances, the appraised value. Let’s say you want to buy a home valued at $300,000 and are able to put down 15% which is $45,000. Take $300,000 minus $45,000 to get $255,000 as the loan amount. To calculate LTV, divide $255,000 (loan amount) by $300,000 (home value) to get 0.85. Loan-to-value is always expressed as a percentage, so a result of 0.85 would translate to an LTV of 85%. In general, the higher your down payment, the lower your loan-to-value.

What is a Good LTV?

What is considered a “good” loan-to-value ratio depends on what kind of loan you’re applying for. When it comes to conventional mortgage loans, 80% is generally considered a decent LTV ratio. This makes sense when you consider that many lenders look for buyers to pay at least 20% as a down payment. That said, if your LTV is higher than 80%, it doesn’t necessarily mean you won’t be approved or will be saddled with a higher interest rate. There are also some programs that allow for higher loan-to-value ratios. FHA loans allow down payments as low as 3.5% which means a loan-to-value of 96.5% is acceptable. USDA and VA loans may allow no down payment at all, meaning an LTV of 100% can even be acceptable. In general, you still want to aim for a lower loan-to-value, but having one that’s higher doesn’t have to make or break your ability to get a desirable loan.

Want to know more about calculating your home equity? Read more here.

Are you thinking about buying a new home or refinancing your current home? Contact one of our knowledgeable loan officers today to learn more and explore your options!

Moving Checklist

Making the move to your new home can be a dream come true! Follow this moving checklist to keep the process as smooth and seamless as possible. You’ll be all settled into your new space in no time!

Moving Checklist – Two Months Prior to Moving: Organize and Purge

Go through each room in your home and decide what to keep and what to get rid of. Having to pack and move items can be a great incentive to let go! Set these items aside for donations or selling. Yard sales are a great idea if you want to make a few bucks to get rid of bulkier items. Also, take note and label any items that will need special packing or insurance.

Research Home Moving Companies

Getting estimates from multiple different home moving companies is a worthwhile time investment. On-site estimates are the most accurate. It’s best to get your estimate in writing(or email), and be sure it has a USDOT (U.S. Department of Transportation) number on it. Due to the current pandemic, most companies are offering virtual moving estimates. You can walk them through your space, they will ask you questions during the walkthrough, while you can let them know what is and isn’t coming on your move. They will provide the same quote as if they went to you on-site.

Start a Home Moving Binder

This a great place to keep track of all your estimates and notes on all the items you’ll be moving. This can include, but not limited too: moving checklist, moving budget spreadsheet, utilities, moving company information.

Collect School Records

If you have children and are moving to a different school district, contact their current school and arrange for their records to be sent over to their new school. You can even put these records into your moving binder to better manage all your paperwork.

Moving Checklist – One Month Before Your Move: Choose Your Moving Company

Select your moving company and get your finalized contract with your dates and other details.

Start Packing

Pack any items that aren’t being used frequently and any off-season items to make things easier on moving day. Clearly label each box with its contents and which room it goes in. Separate any valuables to take with you in your personal vehicle on moving day.

Notify Necessary Parties

It’s a good idea to alert all the following ahead of your move: your banks, brokerage firms, your employer’s human resources department, magazine and newspapers you subscribe to, credit card companies, insurance, and utility companies. If the cable and internet provider you currently use are not available where you are moving, make sure to find a new company that offers the features you want and need.

Forward Medical Records

If you are moving to a new location with a new primary care physician, have your doctor forward your medical records to your new office.

Moving Checklist – Two Weeks Before: Arrange A Few Days Off for Moving Day

If you aren’t moving during a weekend, you’ll want to make sure you have a full day off work to get everything done.

Get your vehicle checked

Make sure your car is all tuned up for the trip! This is especially important if you are moving a long way.

Contact the Moving Company

Reconfirm your arrangements to be safe.

Moving Checklist – One Week Before: Refill your Prescriptions

Get any regular prescriptions refilled prior to your move so you won’t immediately have to worry about having them filled at a new pharmacy

Moving Checklist – A Few Days Before: Pack your suitcases

Try and have all of your packing done a few days before your move, and pack suitcases with a few days of clothes for your entire family so you will be prepared while you unpack at your new house!

Moving Day! : Verify your movers

Make sure the number on the moving truck matches the USDOT number on your contract.


Keep a copy of your signed inventory list once everything has been unloaded.

Now it’s time to enjoy your new home and unpack your labeled boxes that are already in the correct rooms – at your own pace since you already have the prescriptions and clothes you need for now! Congratulations and enjoy!

If you are moving during the pandemic, check out this blog post for even more tips and tricks.

Are you looking to purchase a home? Contact one of our experienced loan officers today!

Source: https://www.realsimple.com/home-organizing/organizing/moving/moving-checklist

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