ACHL Blog

Written by Jim Auten, Mortgage Advisor

Actually, it does if you financed your property prior to March 2009. What this allows homeowners to do is refinance those loans up to 125% of the current value of their home without incurring mortgage insurance. Typically, on a conventional loan, if your loan to value ratio is greater than 80% you will have mortgage insurance added to your payment. This is a guarantee for the lender in case of a default by the homeowner.

These new programs by Fannie Mae (DU Refi Plus) and Freddie Mac (LP Refi) allow homeowners an opportunity to refinance to market rates. Before they would have only been able to refinance up to 95% loan to value but would have the added expense of the monthly mortgage insurance.

There are many restrictions that can come into play so be sure to contact one of our mortgage advisors to find out if your mortgage qualifies. Expected in March 2012 however, the government is planning to release revisions to these programs removing a lot of the barriers including the 125% limit. It will be interesting to see how many homeowner’s can be assisted by these revised programs.