Freddie Mac: Who Owns Your Mortgage?

Freddie Mac is one of the largest purchasers of mortgages in the United States, along with Fannie Mae. Both enterprises are government-sponsored and work to provide liquidity, stability, and affordability to the mortgage market. They do not originate or service mortgages but buy them off private lenders, who then have the cash to extend more loans, widening mortgage access. Freddie Mac offers a self-service loan look-up tool that allows individuals to find out if Freddie Mac owns their loan.

Freddie Mac's loan lookup tool

Freddie Mac is a company that was chartered by Congress in 1970 to keep money flowing to mortgage lenders in support of homeownership and rental housing. Their mission is to provide liquidity, stability, and affordability to the U.S. housing market. They have two divisions: the Single-Family Division and the Multifamily Division. The Single-Family Division purchases mortgage loans from lenders so that they can provide financing options to qualified borrowers. The Multifamily Division provides liquidity and stability to the rental housing market, improving access to quality, affordable housing.

Freddie Mac has a loan lookup tool that allows individuals to find out if Freddie Mac owns their loan. This is important information for those seeking help with their mortgage. To use the tool, individuals must carefully enter their information, as spelling errors, abbreviations, typos, or including the "Street Type" in the "Street Name" field can lead to inaccurate results. If Freddie Mac owns an individual's loan, the resulting page will show a match. If not, no match will be returned.

In addition to the loan lookup tool, Freddie Mac also offers a Rent vs. Buy calculator, which helps individuals assess the financial impacts of renting versus owning a home. They also provide a Home Possible® Income and Property Eligibility Tool, which helps individuals determine if they qualify for a Freddie Mac Home Possible® mortgage based on their income and property location. This tool provides guidance on qualifications for Home Possible® mortgages, but final eligibility is determined within Loan Product Advisor® or via approved manual underwriting.

The benefits of Freddie Mac owning your loan

Freddie Mac, officially known as the Federal Home Loan Mortgage Corporation (FHLMC), is a government-sponsored enterprise that was established in 1970 to expand the secondary market for mortgages in the US. The organisation buys mortgages, pools them, and sells them as mortgage-backed securities to private investors. This process increases the supply of money available for mortgage lending and new home purchases, making it easier for individuals to obtain financing for their homes.

One of the key benefits of Freddie Mac owning your loan is that it can provide stability and liquidity to the housing market. By purchasing mortgage loans from lenders, Freddie Mac helps to keep money flowing to mortgage lenders, supporting homeownership and rental housing. This can result in more financing options being available to qualified borrowers, creating a more stable and accessible housing market.

Additionally, Freddie Mac offers various resources and tools to assist individuals in making informed decisions about their homes. For instance, they provide a Rent vs. Buy calculator that helps individuals assess the financial impacts of renting versus owning a home, considering their unique financial circumstances. They also offer resources like the Loan Look-up Tool, which allows individuals to quickly find out if Freddie Mac owns their loan, and the Borrower Help Centers, which provide support and guidance to those seeking assistance with their mortgages.

Freddie Mac's involvement in the housing market can also lead to increased competition and improved accessibility. By purchasing mortgages and creating a secondary market, Freddie Mac fosters competition between lenders, which can result in more favourable terms and conditions for borrowers. This increased competition can drive down interest rates, reduce fees, and provide more diverse financing options for individuals seeking to purchase a home.

Overall, Freddie Mac's role in the housing market can provide numerous benefits to individuals, including increased stability, liquidity, accessibility, and competition in the market. Their tools and resources also empower individuals to make more informed decisions about their homes, whether it be renting or buying.

Private Mortgage Insurance (PMI)

The cost of PMI depends on several factors, including the size of the mortgage loan, the down payment amount, and the borrower's credit score. The higher the credit score, the lower the PMI rates. The average annual cost of PMI typically ranges from $30 to $70 per $100,000 borrowed. PMI can be paid in several ways, including a one-time upfront premium, monthly premiums, or a combination of both.

PMI is not required for all types of mortgages. Government-backed loans, such as FHA or USDA loans, do not require PMI but have their own associated fees. Borrowers can also avoid PMI by making a 20% down payment or opting for an 80-10-10 loan, where a 10% down payment is made with two mortgages covering the remaining 90%.

To determine if Freddie Mac owns your loan, you can use their self-service loan look-up tool. Freddie Mac is a company chartered by Congress in 1970 to support homeownership and rental housing by providing liquidity, stability, and affordability to the US housing market. They purchase mortgage loans from lenders, allowing them to provide financing options to qualified borrowers.

How to refinance your loan

If you want to refinance your loan, it's important to first find out who owns your loan. You can do this by using the Freddie Mac Loan Look-up Tool. Simply enter your information carefully, as small mistakes or abbreviations may lead to inaccurate results.

If Freddie Mac owns your loan, you can take advantage of their cash-out refinance mortgage options. These allow borrowers to leverage their home equity for immediate cash flow. For example, borrowers can consolidate debt, obtain cash for home improvements, or reduce their monthly payment. All related closing costs, financing costs, and prepaid items can be rolled into the new loan amount.

Freddie Mac also offers the Refi Possible program, which helps low- and moderate-income homeowners refinance their mortgages to lower their monthly payments. This program provides flexible options for those who may not qualify for traditional refinance programs. To be eligible for the Refi Possible program, borrowers must have made all payments while the loan was in forbearance, and the mortgage must meet the payment history requirements, which do not allow recent missed payments.

Additionally, when considering refinancing, it's important to be aware of the various requirements and guidelines that need to be met. These include credit score requirements, such as a minimum FICO score of 640, as well as Loan-to-Value (LTV) ratios and maximum LTV ratios that must be complied with.

By exploring these options and understanding the requirements, you can make an informed decision about refinancing your loan with Freddie Mac.

The difference between renting and owning

The decision to rent or buy a home depends on several factors, including your financial situation, lifestyle, and future plans. There are substantial differences between renting and owning, each with its own set of compelling advantages.

Renting

Renting a home provides greater flexibility, making it easier to relocate. It also requires less upfront payment, with landlords typically asking for the first and last month's rent as well as a security deposit. Repairs are generally the responsibility of the landlord, and while your rent may increase, it is usually more predictable than the fluctuating costs of owning a home. Renting is a good option if you are unsure about the location or if you require more flexibility in your life.

Owning

Homeownership offers more stability and a sense of community and belonging. It is a place that is truly yours, and you have the freedom to customise and renovate it as you wish. Owning a home is also an investment that can build equity over time, increasing your personal wealth. You can access this equity later if needed. However, there are significant upfront costs and maintenance responsibilities associated with owning a home. Most mortgages require a down payment, and you are responsible for all maintenance and repairs.

To summarise, renting provides flexibility and lower upfront costs, while owning offers stability, a sense of belonging, and the opportunity to build equity and customise your living space. The right choice depends on your personal circumstances, preferences, and financial goals.

Frequently asked questions