by John Roney
President Obama?s recently enacted homeowner mortgage stimulus plan will allow millions of homeowners the amazing chance to refinance their current home mortgage into a new one with a 4.5% fixed rate. This ?Mortgage Refinance Affordability Plan? will have homeowners savings hundreds per month. Here is how it works: Right now, there are several grants, tax credits, and incentive programs to help homeowners overcome this tough economy and mortgage crisis, regardless of their credit history. Although these Government backed programs are designed for help in the short term, it will save millions of homeowners from losing their home to foreclosure or forced sale.
These government grants and loans can also be used to pay off other debts a homeowner may have such as credit cards, auto loans, tuition, and a whole list of others. Also now available to homeowners who are facing ?Financial Hardship? mortgage refinance programs. These ?Financial Hardships? can be a loss of job, loss of income, hospital bills, tuition, credit card debts, auto loans, and other expenses. Using these home mortgage modification programs, a homeowners mortgage payment will not be more than 31% of their gross monthly income.
The property to be refinanced must be your primary residence. Only loans written under Freddie Mac or Fannie Mae are eligible. The present balance of your mortgage cannot be more than 105% of the home?s present value. Proof of earnings or other income must be provided to show that you are financially able to make the refinanced mortgage payments. You should keep in mind that if your present mortgage has a low-rate negative amortization option, or if your payments are applied to interest only and not to principal, your new payments under this plan could actually increase.
The mortgage must be a first mortgage, or trust deed. If there is a second lender in place, it must agree to subordinate its interests after the refinanced first mortgage. The President?s second plan is the ?Home Affordable Loan Modification Plan?. This is available for all mortgages, not just those serviced by Freddie Mac or Fannie Mae. You must meet the following requirements to be eligible for this plan: The mortgage you are seeking to modify must be on your primary residence. The principal balance on your mortgage cannot exceed $727,750.00. (This figure is based on a single unit dwelling; there are higher limits for two to four unit dwellings). Your mortgage must have been in place prior to January 1, 2009. Your current mortgage payment, including taxes and insurance, must be more than 31% of your gross monthly income. You must prove a financial hardship under your present mortgage.
Refinancing your mortgage using President Obamas ?Home Affordability Plan? will save millions of homeowners thousands of dollars over the course of their home loan. The rush to refinance is on as homeowners look to take advantage of this refinance stimulus plan and lock themselves into a fixed rate low interest loan. Others are using this refinance package to save their home from foreclosure. Either way take advantage now and see the savings start to quickly add up.
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