- 1). Before you contact a lender, know the reasonable approximate value of your home. This information helps lenders know what loan programs to offer. Freddie Mac offers many different programs, and most lenders have access to those programs. Knowing the realistic Loan-to-Value (LTV) enables the broker to provide accurate quotes for your situation. The LTV is the percentage of your loan amount compared to the value of the home. So, a $90,000 loan on a $100,000 home equals 90 percent LTV.
- 2). Contact lenders and ask for quotes. Lenders will request permission to pull credit. Do not allow this. You will have to give the lender a realistic idea of your credit profile. If you overstate your credit profile, the quote may not be accurate. If you authorize each lender to pull your credit, this can have a negative effect on your credit score. Wait until you have chosen a lender to authorize this. Be sure to request quotes on Freddie Mac programs, as they may not be the lender's first choice.
- 3). If Freddie Mac currently owns your loan, you may qualify for two special programs. Freddie Mac's relief refinance program offer LTVs much higher than traditional loan programs. Freddie Mac designed these programs for borrowers whose houses have declined in value. If you have experienced decline in value, and Freddie Mac owns your loan, contact your current lender. You may qualify for a simplified type of refinance that requires much less paperwork and much easier qualifying standards than typical refinances do. They also can go up to 125% LTV, so you can actually borrow more than the home's worth if needed.
- 4). If Freddie Mac does not own your mortgage, ensure your broker is using Freddie Mac's Loan Prospector system. Freddie Mac offers Loan Prospector to lenders as an automated underwriting system. Once you have fully applied and authorized a credit report to be pulled, the lender runs the details of the loan through Loan Prospector. This ensures your loan meets Freddie Mac's guidelines and will be sold to Freddie Mac.
- 5). If Freddie Mac does not own your mortgage and you desire to have them own your mortgage, ensure your broker using Freddie Mac's Loan Prospector system. Freddie Mac offers Loan Prospector to lenders as an automated underwriting system. Once you sign the application and authorize pulling of your credit report, the lender runs the details of the loan through Loan Prospector, this ensures your loan meets Freddie Mac's guidelines and before being sold to Freddie Mac. There isn't much for you to do other than request this from your broker at application.
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