Home Mortgage Refinance is Easier With “Making Home Affordable”
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.
What is “Making Home Affordable”?
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.
Stimulating the sluggish real estate market is one reason President Obama pushed this legislation through Congress. As well, the millions of Americans who have been negatively affected by the poor economy will benefit by avoiding foreclosure from their lenders.
The Making Home Affordable plan is part of the $75 billion bailout package which was approved by Congress. Mortgage companies are being given incentives in order to minimize their risk while modifying current mortgages or approving new ones. This is good news for homeowners, or potential homeowners, who will find they now have many more options for mortgage loan terms and the number of lenders who are willing to work with them.
Is the Making Home Affordable Plan Appropriate For You?
Anyone who felt the need to seriously consider a home mortgage refinance due to financial difficulties or the real estate market prior to now will be happy to know this package may be just the answer they were waiting for.
With the Making Home Affordable plan, lenders must work with homeowners to reduce their monthly payments to 31% or less of their income currently being earned. Between the failing real estate market and the recessionary state of the economy, it is not unusual to find homeowners who are paying up to 50% of everything they make monthly on a mortgage payment alone.
Banks and mortgage lenders have received a set of guidelines as part of the Making Home Affordable plan. They can offer a 2% mortgage rate, if that will help reduce the ratio of payment to income. Cash incentives from the government will help pay for this reduction.
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.
Getting a great home mortgage refinance rate might just be within reach now that the Making Home Affordable legislation has been enacted. With a lowered interest rate or modification to the monthly mortgage payment, many Americans can save thousands of dollars and achieve peace of mind that they will not lose their home.
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