Debt Be Gone Today

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.

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.

As you may have seen in recent news reports, Making Home Affordable was a major part of the $75 billion bailout plan Congress approved. Mortgage lenders received the bulk of cash incentives in order to cover modifications to current loans and also to approve new mortgages. For homeowners or buyers, this has opened up many opportunities and increased competition from lenders for their business.

Is the Making Home Affordable Plan Appropriate For You?

If you were previously considering a home mortgage refinance but found that it didn’t make sense financially, or was impossible due to restrictions placed by the lender, then it may be the perfect time to revisit this option.

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.

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.

For the homeowner who is looking for a home mortgage refinance, they must first qualify to be eligible under this stimulus plan. They must be current on their loan in the last year and must not have made any payments more than 30 days past due. They are required to sign a letter of Financial Hardship stating that their income has been reduced, for whatever reason, in order to qualify for the 2% interest rate. If the property value has fallen by 15% or more, than the fixed 2% rate may also be an option. Anyone who financed their home with Freddie Mac or Fannie Mae is eligible for modification.

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.