 TITLE: New Mortgage Refinance Option for Low-Income Families CONTENT: Is Now a Good Time to Refinance?\n--------------------------------\nThe recent trend of low interest rates suggests it could be a good idea to consider refinancing. Normally when the economy is healthy and unemployment rates are low, interest rates—the cost of borrowing money—rise because people feel more confident about borrowing to buy things they want (like a house). During uncertain economic times, however, rates usually fall because people are more cautious about taking on debt; in those cases, the U.S. government (through the Federal Reserve) and lenders try to make borrowing more attractive and less expensive, hence the lower interest rates during the pandemic.\nThe FHFA notes that people who benefit from the new program would save at least $50 per month on their mortgage payment, but they anticipate homeowners saving closer to an average of $100 to $250 a month. These numbers might not seem like much at face value, but an extra $1,000 to $3,000 per year could be the difference between having a solid emergency fund and not having a financial cushion at all.\nThe benefits of refinancing seem clear, but recent data shows many homeowners who could benefit from refinancing haven't taken advantage of that option. A study done by Freddie Mac revealed that between February and June of 2020, high-income households saved significantly more on refinancing than those with lower incomes when compared with previously popular refinancing periods.\n\"Last year saw a spike in refinances, but more than 2 million low-income families did not take advantage of the record-low mortgage rates by refinancing,\" Mark Calabria, director of the Federal Housing Finance Agency, said in a statement.\nPart of the reason some people don't pursue mortgage refinancing is because the process can get expensive: The FHFA's new program is intended to help offset some of the costs that come up. For example, it can provide a credit worth up to $500 for an appraisal, which is usually paid out of pocket by the homeowner.\nIt's also important to note that this new refinancing program does not permit cash-out refinances. A cash-out refinance allows you to tap part of the home's equity, which in turn frees up cash. If this is the type of loan you're looking for, you'll need to look outside the program. END