Would you like to refinance but have a high loan to value (LTV) ratio? The LTV ratio is an assessment of lending risk based on how much you are borrowing based on collateral. Fannie Mae has a high LTV refinance option for borrowers with existing Fannie Mae mortgages who are making their payments on time but whose LTV ratio for a new mortgage exceeds what is allowed for standard limited cash-out refinance options.
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To qualify for a high LTV refinance option the borrower must benefit by the refinance resulting in a reduced monthly principal and interest payment, lower interest rate, shorter amortization term, or more stable mortgage product such as converting to a fixed-rate mortgage.
Fannie Mae has the following requirements for eligibility for their high LTV refinance option. The borrower must be refinancing from an existing Fannie Mae mortgage. The date of the note for the mortgage being refinanced must be on or after October 1, 2017. There must be 15 months or more between the note date of the mortgage being refinanced and the note date of the high LTV refi mortgage. Borrowers have to be current with mortgage payments and not have any 30-day delinquencies in the past 6 months or more than one 30-day delinquency in the last 12 months with no delinquency being greater than 30 days. The mortgage the borrower is refinancing cannot have been previously delivered as a Fannie Mae DU Refi Plus or Refi Plus mortgage. Borrowers can refinance multiple times with the high LTV refinance option if all requirements are met.
Existing mortgage insurance on the old loan must be transferred to the new loan. Simplified documentation is required for employment, income, and assets. Desktop underwriting and manual underwriting are available to the same or a new servicer.
Are you interested in refinancing but afraid you don’t have enough equity in your home? If you have a Fannie Mae mortgage it is worth checking with your servicer to see if you qualify for their high LTV refinance option.