New Refinance Loan for People Who Didn’t Qualify Before
If you, or someone you know, missed out on refinancing into a lower interest rate mortgage during the past few years because your debt-to-income ratio (DTI) was too high, we have a new loan program that allows your DTI to be as high as 65%. That is a huge increase over the 50% maximum DTI for other conventional loans.
Here’s what you need to know.
Fannie Mae (one of the companies that buys mortgages from lenders) introduced this product because many homeowners did not qualify for a regular refinance mortgage, and the government wants as many people as possible to get the low mortgage rates that are now available.
In order to qualify for one of these high DTI loans, you must satisfy the following requirements:
- Your current loan must be owned or securitized by Fannie Mae.
- If you don’t know if your current mortgage is owned or securitized by Fannie Mae, we can very easily find that out for you. This information is probably not on your mortgage statement, so don’t assume you won’t qualify – you should ask us to check this for you.
- Your income must be less than or equal to 80% of the area median income (AMI) where your house is. In most of the Denver Metro area, 80% of the AMI is $83,840. We only have to count “qualifying income”, which is very often lower than your total income, so again, don’t assume you won’t qualify for this new loan – you should ask us to check for you.
- You must have had your current mortgage for anywhere between 12 months and 120 months (1-10 years).
- The new loan must have an interest rate that is at least 0.50% less than your current loan, and your new monthly payment must be at least $50 less than your current payment. These rules are in place to ensure that you are not being taken advantage of by the lender.
- If you need an appraisal (we will know if you need one after running your loan file through Fannie Mae’s underwriting software), we will credit you $500 to cover the cost of the appraisal.
- There are other rules, of course, but the ones listed above are the main ones.
This is a wonderful opportunity to refinance into a lower rate mortgage is you were denied for a refinance before because your debts were too high or your income was too low. Contact us today to see how easy it is to get a great mortgage.