It’s now easier for low-income homeonwners to refinance.
Thanks to the initiative from the Federal Housing Finance Agency (FHFA), low-income borrowers will soon be eligible for reduced-cost refinances. These will guarantee a lower interest rate and monthly payment. According to the FHFA, this option will save borrowers anywhere from $100 to $250 per month, on average. So qualifying homeowners could save between $1,200 and $3,000 a year.
Mortgage refinancing means that you replace your current mortgage with a new loan. This new loan will ideally have a lower interest rate. It can allow you to lower your monthly payment and save money on interest over the life of your loan. Moreover, with a refinance you can draw from your home’s equity in case you need cash. Also, you can pay your mortgage off sooner.
A first mortgage is the initial or primary loan obtained for a property. When you get a first mortgage to purchase a house, a “primary lien” is placed on the property by the mortgage lender who funded it. That way, the lien gives the lender the first right or claim to the house in case of default on the loan.
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