No one buys a home anticipating having to refinance it months or a couple of years later. However, when the unforeseen happens to you, like losing your job, or an unexpected disaster, like COVID-19, there are times you have no other option but to consider applying for a High loan-to-value (LTV) HIRO Program. The HIRO program started November 1, 2018, and is the replacement program for the Home Affordable Refinance Program (HARP).
You may think you should consider the HIRO program because you know when you are dealing with a mortgage that timing is everything. You also know that you cannot skip your mortgage payments due to the negative impact it will have on your credit rating, as well as successfully obtaining a HIRO mortgage loan. You also know that you are dealing with the most important asset you have when you refinance your home, so is it important that you learn more about the opportune time to explore the High LTV HIRO program.
Read on to learn more about refinancing your mortgage at today’s lower rates. Sometimes the only way to move forward is to start a new lending process today.
The High LTV HIRO Program was designed to help homeowners refinance their mortgage to give them lower payments at a lower interest rate. The HIRO Program is best used by those who have little to no equity in their home. The low equity means that even with an exemplary credit rating it is not easy to refinance if you do not have much money tied up in your home.
Some people remember the HIRO program when it was called the Fannie Mae High LTV Refinance Option mortgage loan. Sometimes it is still referred to by that name and the objectives are the same, whatever you call them. The goal is to help homeowners who are drowning in a sea of debts that they can no longer pay off because they are out of work or unable, for various reasons, to meet their current mortgage payments.
One in every 873 homes is foreclosed on in the first quarter of 2020. That is not counting the ones that will be foreclosed on after COVID19 is no longer a threat. With the HIRO program, you will receive a lower monthly principal and interest payment, sometimes accompanied by a shorter repayment term.
High LTV Refinance Mortgage Program
High LTV usually means your loan-to-value rate must be at 97.01% or higher. If your LTV is lower than 97.01%, your loan or mortgage broker may connect you to a few other programs to see if you qualify. For information purposes, it is important to know that the standard for a sufficient loan-to-value ratio is 80 percent.
It is 80% because that is the percentage that allows you to avoid paying homeowner’s insurance (PMI). If you put less than 20% on a standard or conventional mortgage, you will have to pay for private mortgage insurance. One of the significant benefits of LTV, however, is that there is little paperwork and a streamlined approval process so you do not have to wait days or weeks to find out if you qualify, so this is excellent news if you are behind on your mortgage payments.
Sometimes a mortgage program to refinance high LTV is ideal if you currently have a variable rate mortgage (ARM) and would like to convert it to a fixed-rate mortgage. If you think you can qualify for a High LTV HIRO program, you want to find one as quickly as possible. The last thing you want to do is start missing mortgage payments when you still have so many financial options.
HIRO Mortgage Program
There are many unique documents and ancillary information you will need to apply for a HIRO mortgage program. There are also some common criteria that you need to meet if you want to refinance your mortgage through a HIRO program. The most important information you need to know or meet is Fannie Mae needs to own your current mortgage.
Your mortgage must have originated after October 1, 2017, and you must be at least fifteen months from that date of the loan origination. You also cannot have a 30-day default for the last six months. Over the past twelve months, you may have only had a 30-day default on payment and never had a payment more than thirty days before maturity.
Then and only then do you qualify for applying for a HIRO mortgage program. Even if you qualify on paper for the HIRO program, you still need to be screened to determine your income, liquid financial reserves, which must be at least twelve months equal to the new housing payment, including your taxes and insurance. HIRO funding rates are low, as are all mortgage rates, so it is worth considering all options when choosing the HIRO program.
The Way Forward With the HIRO Program
Even if you fulfill all the criteria for the HIRO program most of the time, you still need to have a credit score of about 620 or higher. In addition, most HIRO programs for mortgage appraisal allow you to waive your home, but that is not guaranteed. The appraisal will be determined after you have submitted a full application to the lender.
As there is no maximum LTV, you never have to worry about the valuation value, no matter how low or high it is. There is no upper limit on the debt-to-income ratio because you refinance to achieve lower monthly costs in most cases, and this means you will soon be in a stronger financial position, no matter where your debt-to-income ratio begins. If you are willing to move on with applying for a High LTV HIRO program mortgage, contact the Mortgage News Channel.
The Mortgage New Channel will help you find the best rates with the latest information on the HIRO program. Undoubtedly, it is easier to move forward when you know you have a first-class team to turn to for answers to your questions and information on your next steps.
Reach out to The Mortgage News Channel soon to help ease your stressful mortgage problems with workable financial solutions and answers.
We at 7th Level Mortgage are an experienced team of mortgage professionals based out of New Jersey and serving the east coast from Pennsylvania to Florida including Delaware and Maryland. We have won numerous awards for our excellent professional work and reputation with clients for being extremely diligent, accessible and hands-on throughout the entire mortgage process.