If you are one of the many people who have been turned down by a mortgage lender to refinance home mortgage, millions of homeowners who are struggling are given a chance refinance their home mortgage into a 4.5% fixed rate mortgage. Continue reading and you will see that it is even possible to get a 2% fixed rate mortgage. Obama’s plan to “make home affordable” for people help homeowners who use this plan save hundreds of dollars per month.
The “Making Home Affordable” Plan
As in my earlier post back in March 2009, the Obama plan eases the restrictions and requirements for homeowners so they may have a greater chance to refinance their mortgage. There are several situations that requires mortgage lenders and banks to perform a home loan modification. Almost everyone who are now struggling due to this tough financial crisis are eligible to benefit from this housing bailout.
The main objective of Obama’s plan was to stimulate the housing market, make more homeowners eligible for new loans, and also giving a chance for existing homeowners to refinance home mortgage. The main objectives above are hoped to also slow down the tide of foreclosures across the US.
The Obama plan was only a $75 billion part of a much bigger plan. A large percentage of this money was given as cash incentives to mortgage lenders and banks to cover the existing home loans. With this cash, they are now able to offer new loans to potential homeowners.
How can this plan benefit you?
Currently, many have looked into refinancing and figured that the decision to refinance home mortgage was just not making financial sense. Some even could not refinance their home mortgage because the requirements and restrictions made by mortgage lenders just makes it not possible for them to do so. With this new plan from Obama, this all can change.
Due to the guidelines in this plan, all mortgage lenders and banks are required to assist homeowners to reduce their monthly payments so that homeowners would only be spending not more than 31% of their income on mortgage repayment. Since the housing boom, a lot of homeowners have violated this simple money management rule and are currently paying upwards of 50% of their monthly income (and some even more!) towards their mortgage payment.
To meet this guideline set by Obama, mortgage lenders and banks are even allowed (and required) to offer home interest rate as low as 2%. They are able to do this without damaging their own finances because the cash incentives that Obama has poured out for mortgage lenders and banks have covered the costs that they accrue from giving this low interest rate mortgage.
To find out if you qualify for this plan and are able to refinance home mortgage, read below:
1. You should be current and on time with all mortgage payments for the past full year. Unfortunately, if within the past year, you have had any payments that were more than 30 days late, you are not eligible.
2. They will ask you for a “Financial Hardship” letter which states the reason why you would want to refinance, such as loss of job, loss of income, or other reasons.You will have to provide this letter to qualify for the plan.
3. You will qualify for a 2% mortgage rate if the value of your property has fallen by 15% or more.
4. If your mortgage is financed through Fannie Mae or Freddie Mac, you are automatically eligible for a 2% home loan modification.
Every month, around 9 million homeowners are saving about hundreds of dollars because they are taking advantage of Obama’s refinancing plan.
Popularity: 8% [?]
1 Response
Very nice post.Refinancing may help you lower your monthly charges, and over the long run, add up to significant discounts. Understanding your options is very important so you get the maximum benefist possible. Contact your mortgage company for additional details and information about refinancing.
Posted on June 16th, 2010 at 5:38 pm
Add A Comment