Relief Refinance Mortgage by Freddie Mac falls under this banner. It's now official that the previous limit of 105% has been pushed up to 125% loan-to-value, or LTV, something that Washington had been tossing around for a bit. "This is a change that will put affordable refinancing opportunities within reach of performing borrowers who have suffered the effects of local home price erosion," explained a Freddie Mac wool suit. Qualifying homeowners are current on their payments and have a mortgage owned or guaranteed by the agency.
Freddie Mac's Relief Refinance Mortgagehas some nice features, too. It lets borrowers finance closing and financing costs and prepaids/escrows up to $5,000, or 4% of the mortgage balance being refinanced, whichever is less. In addition, MI, or mortgage insurance, is not needed if the underlying note does not have one. If there is an MI on the existing mortgage, the new one must keep the same coverage.
Las Vegas homeowners could benefit from Relief Refinance Mortgage. Many who bought property in the last five-six years with little or nothing down are generally upside down and as long as they are not too much so, they could be eligible here. Let's say that a home is presently worth $250,000, then under the old rule of 105% LTV the refinance could go to $262,500, or $12,500 over the actual value. In the new scenario at 125% LTV the refinance amount could reach up to $312,500, or $62,500 over the home's value. This is more like it. The new, higher limit will make a real difference.
HARP makes now more sense in those areas, including Southern Nevada, that were hammered the worst during this real estate calamity. It gives borrowers another useful option to consider when dealing with difficulties in meeting their mortgage obligations.