Will refinancing lower my payments?
Refinancing your home often will lower your monthly payments. However, whether your payments are reduced may depend upon how your home is refinanced and whether your loan is modified or not. Under the Home Affordable Refinance program, creditworthy borrowers who have shown a commitment to paying their mortgage have the opportunity to refinance their mortgage so that the payments are affordable and sustainable for the life of the loan.
Borrowers whose mortgage interest rates are much higher than the current market rate should see an immediate reduction in their payments. However, borrowers who are paying interest only, or who have a low introductory rate that will increase in the future, may not see a reduction in their payment if they refinance to a fixed rate and payment. These borrowers, however, could save a great deal over the life of the loan by avoiding future mortgage payment increases.
When you submit a loan application, your lender will give you a "Good Faith Estimate" that includes your new interest rate, mortgage payment and the amount that you will pay over the life of the loan. Compare this to your current loan terms. If it is not an improvement, a refinancing may not be right for you.
Other Refinancing a Home FAQs
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Q:
How do I apply to refinance my mortgage under the Home Affordable Refinance Program?
A: You should call your mortgage servicer or lender and ask about the Home Affordable Refinance application process. The number is on your monthly mortgage bill or … More -
Q:
When and why does foreclosure begin?
A: Lenders will initiate foreclosure proceedings when homeowners become delinquent in their mortgage obligations, usually after three payments are missed. The lender … More -
Q:
Will refinancing my mortgage under the Home Affordable Refinance Program, or other programs, reduce the amount that I owe on my loan?
A: Refinancing your mortgage under the Home Affordable Refinance Program will not reduce the amount you owe on the mortgage. The objective of the Home Affordable … More -
Q:
How do creditors get paid when foreclosing on a house to satisfy unpaid debts?
A: A foreclosure is where the creditor collects its lien by forcing a sale of the debtor's real property. The creditor receives the amount of the proceeds from the sale … More -
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What are the eligibility requirements to refinance under the Making Home Affordable Plan?
A: You may be able to refinance your mortgage under the Making Home Affordable Plan if: • You are the owner occupant of a one to four unit home; •The … More -
Q:
What is the Homeowner Affordability and Stability Plan?
A: Congress recently passed the Homeowner Affordability and Stability Plan (“the Plan”), which provides various options for homeowners who are feeling the … More -
Q:
If I'm current on my mortgage will the Home Affordable Refinance Program help me?
A: If you are current on your mortgage, you may be able to refinance your loan under the Home Affordable Refinance Program. Many homeowners who … More -
Q:
What is a loan modification, and how will it help me with my mortgage?
A: A loan modification occurs when a homeowner enters into an agreement with his or her mortgage loan servicer to change the terms of the mortgage. The goal … More -
Q:
I owe more than my property is worth. Do I still qualify to refinance under the Making Home Affordable Program?
A: You may still be able to refinance your home under the Making Home Affordable Plan even if you owe more than your property is worth. Eligible loans will include … More -
Q:
How long does it take to get a loan modification?
A: The length of time that it takes to get a loan modification depends greatly on how long it takes your mortgage holder to process your loan modification, as … More
