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Despite mortgage rates hitting historic
lows during the last year, many
homeowners still haven’t considered refinancing
their mortgage — essentially,
replacing an existing mortgage with a
new mortgage loan that has new terms
and potentially a lower interest rate.
Homeowners in lower-income brackets
may be convinced they won’t qualify for
refinancing because of high debt compared
to income, poor credit scores or
lack of savings to cover closing costs.
However, new refinancing options
are available to help make monthly
housing payments more affordable.
Fannie Mae — which helps make the
30-year fixed-rate mortgage and affordable
rental housing possible for millions
of people in America — recently
released RefiNow, an option that makes
it easier for lenders to help eligible
homeowners earning at or below 80%
of the area median income refinance at
a lower interest rate and reduce their
monthly mortgage payment.
“Lower-income borrowers typically
refinance at a slower pace than highincome
borrowers,” said Katrina
Jones, vice president of Racial Equity,
Saving Money by Refinancing
Refinancing your home is an option regardless of
income level.
Strategy & Impact at Fannie Mae.
“Especially for those who have a high
or adjustable interest rate loan, refinancing
may help make housing costs
more affordable and sustainable by
lowering their mortgage payments, reducing
the total amount of interest paid
over the life of the loan, or providing
Southwest Orlando Home & Real Estate | November 2021 | 3
more stable monthly mortgage
payments.”
The new RefiNow option requires
that eligible homeowners
achieve a savings of at
least $50 in their monthly mortgage
payment, but they can
potentially save up to $100-
$250 per month, according to
representatives of the Federal
Housing Finance Agency.
It also offers savings on upfront
out-of-pocket appraisal
expenses up to $500.
“We can put money-saving
refinance options in reach for
more homeowners by removing
some perceived barriers — such as
appraisal costs — to improve affordability
and promote sustainable homeownership,”
Jones said.
She provided three reasons to consider
refinancing now:
• Interest rates are low. Mortgage
rates remain low, despite moderate
increases. According to Fannie Mae
research, experts expect the 30-year
fixed mortgage rate to average 3%
through this year before beginning to
rise in 2022. The takeaway for homeowners?
There’s still time to consider
refinancing.
• Lower your monthly mortgage payments.
Refinancing at a lower interest
rate may help decrease monthly mortgage
payments, which could increase
monthly savings. Refinancing may also
help reduce the total amount of interest
paid over the life of the loan, depending
on the terms of the new loan and
the existing loan.
• Getting started is a phone call
away. Homeowners should contact
several mortgage lenders to discuss
refinance options to find the best option
and terms for their situation, and
they should always compare offers and
shop around.
Homeowners wondering if refinancing
makes financial sense can access
Fannie Mae’s Refinance Calculator and
learn more about refinancing options at
knowyouroptions.com.
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