PHOENIX (3 On Your Side) - An estimated two million homeowners may be able to cut their mortgage payments by hundreds of dollars a month, thanks to a new government program that just launched. It’s targeting lower-income homeowners who may have previously been locked out of refinancing options.

Greg McBride, the chief financial analyst for Bankrate, says despite the past year’s record-low mortgage rates, only about 20% of homeowners have refinanced.

"The wave of refinancing we had seen last year was predominantly among households with much higher credit scores than average, and in many cases above-average incomes," McBride told 3 On Your Side. "When you look at that, you think, wait a minute, there are a lot of lower-income households, maybe those whose credit is decent. It’s not the ultra-high credit score, but still pretty good, and we don’t want to see those households locked out of refinancing."

The Federal Housing Finance Authority estimates the new refinancing option for loans owned by Fannie Mae and Freddy Mac could save lower-income homeowners between $1,200 and $3,000 per year on mortgage payments.

Fannie Mae's program, called RefiNow, just opened to borrowers. Freddy Mac's program is expected to launch by the end of the summer. To qualify, the mortgage must be for a single-family property. The homeowner has to make 80% or less of the area's median income, have no missed payments in the past six months, and a FICO score of at least 620.

"Refinancing your mortgage can trim the largest component of your household budget in a meaningful way, $100, $200, maybe more per month," McBride said. "That can create valuable breathing room, particularly if income is tight."

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