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.
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.
Will Making Home Affordable Work 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.
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.
Mortgage lenders are required to adhere to a set of guidelines outlined as part of the legislation in the Making Home Affordable package. In some instances they are able to offer a very low 2% interest rate. The money they are losing will be covered by the government's cash incentives as part of this plan.
Eligible homeowners must meet certain criteria to receive these great home mortgage refinance terms. First, they must be current on their loan, and stayed current on all payments in the last 12 months with no payment past due for more than 30 days. If they are seeking the 2% interest rate, they will have to sign a letter of Financial Hardship which outlines the reason for their loss of income. Another way to get the 2% rate is by proving that the value of the real estate mortgaged has fallen by at least 15% in value. And any homeowners who used Fannie Mae or Freddie Mac as their mortgage lender are automatically qualified.
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.
