Home Mortgage Refinance is Easier With “Making Home Affordable”
Posted on May 19, 2009 in the Mortgages category
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There are currently millions of American citizens who have been affected by the recessionary economy and who may have considered a home mortgage refinance. Most of those who recently lost part of their income are facing difficulty making the monthly payment. Still others wish to sell their home but find they cannot do in the current market and may be facing foreclosure. These are the types of people President Obama is trying to help with his “Making Home Affordable” package.
About the “Making Home Affordable” Package
The president recently enacted this package with the requirement that lending institutions work with homeowners to come up with modifications or home mortgage refinance options that will help them make their monthly payments. With looser restrictions, many citizens are finding they are eligible for a great savings with this program, and many will find they will not lose their home.
The president’s goal in enacting this piece of legislation was to ultimately provide a positive effect on the real estate market. He is also hoping that the millions of citizens negatively affected by the recessionary economy will find relief, and be able to avoid foreclosure.
Most everyone has heard of the $75 billion bailout plan which Congress approved in the last couple months. Much of the money was earmarked for cash incentives to banks and lending institutions, which are required to pass it along to homeowners by modifying their loan terms. The result is that there are many more choices when buying a new home, or refinancing an existing one.
What the Making Home Affordable Plan Can Do For You
Were you considering a home mortgage refinance and realized that it did not make sense financially or impossible because of excessive restrictions from the mortgagor? With this new legislation, all that may have changed for the better.
Making Home Affordable states that eligible homeowners can work with their mortgage company to lower payments to 31% or less of their reduced monthly income. This will affect quite a few Americans who are currently paying anywhere upwards of 40% or more on their mortgage each month.
Lending institutions must adhere to the guidelines of this stimulus package by offering a 2% rate on existing loans, thereby reducing the percentage of income being paid out on a mortgage. Their costs are covered by the government’s cash incentives.
If you are seeking a home mortgage refinance under these terms, you must be aware of the qualifications. These include being current on your mortgage payments now and for the previous 12 months. If any of your payments fell more than 30 days behind, then you are not eligible. You may also need to sign a Financial Hardship letter which states the reason for your loss of monthly income. Any homeowner who has seen their property devalue by more than 15% could receive the 2% interest rate, as well as anyone who financed their home through Fannie Mae or Freddie Mac.
Now that the Making Home Affordable package has been enacted, the possibility of a home mortgage refinance that saves you thousands of dollars annually may just be within your reach. Consider your options and get started saving money today.
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