Today, President Obama, in a online town hall meeting, again addressed his “Home Affordability Plan” and how it will help homeowners save hundreds of dollars per month by refinancing into a better mortgage. He wanted to reinforce that up to 40% of all current mortgage holders are eligible for refinancing. I have included some details of this plan.

“That's why we've launched a plan (The Home Affordability Plan)to stabilize the housing market and help responsible homeowners stay in their homes. This plan is one of the reasons that mortgage interest rates are now at near-historic lows. And we've already seen a jump in refinancings of mortgages, and homeowners taking advantage of lower rates. And every American, by the way, should know that up to 40 percent of all mortgages right now are eligible for refinancing.” - President Obama, March 26, 2009

Below are some of the eligibility requirements to refinance under this plan:

-The homeowner must not owe more than 105% than their home is worth. This will help a lot of homeowners who bought a house during the housing boom when property values were skyrocketing. Now, with the housing market slowing to a near halt, property values have dramatically sunk leaving homeowners with a mortgage that is for more money than the home is worth.

-The homeowner must live in the home. This can not be a investment or vacation property.

-If your mortgage is backed by Freddie Mac or Fannie Mae, you will be eligible to modify or refinance your mortgage, regardless of your financial situation, into a monthly payment that will not exceed 38% of your monthly gross income. Millions of homes are backed by these 2 lending powerhouses and that means odds are you are too.

-If the mortgage lender or bank is taking part in this government program, the usual 20% equity required in the home to refinance is not necessary.

Mortgage lenders and banks are being given incentives from the government to refinance or modify mortgages from “risky” borrowers. In some cases, dollar for dollar is being matched of the lenders expenses or costs related to refinancing a borrower under this plan. This means that if you have trouble refinancing before odds are you are eligible now. Refinancing a mortgage now is a great way to take advantage of the low mortgage rates and save your home from foreclosure. Contact potential mortgage lenders and banks for more information.

-M Petrone

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