If you are a homeowner looking to take advantage of the Obama stimulus package, all the information you need is right here. The “Home Affordability Plan” is basically a stimulus plan from the Obama administration for homeowners. This plan will help roughly 6 million current homeowners refinance into a new 4.5% fixed rate mortgage. Millions of homeowners will save hundreds every month on their mortgage.

This plans main focus is on homeowners who have remained up to date on their mortgage payments for at least the past 12 months. For these homeowners, refinancing and loan modification will be easier and provide more savings now than it has in the past. Before, the typical amount of equity required to refinance your home mortgage was 20%. Now though with this stimulus plan from Obama, homeowners will be able to more easily refinance their mortgages into a stable fixed rate, and save money every month. Homeowners may owe as much 105% of their homes worth and still be approved for a mortgage refinance at a reasonable rate. This is great news for millions of homeowners who have seen their property values drop drastically just in the past few years. This is possible in part from the government using this stimulus bill from Obama offering cash incentives to mortgage lenders and banks who take on these “risky” borrowers who fall into the stimulus eligibility requirements. Also, homeowners will be allowed to modify their mortgage under this plan into a monthly payment that is not to exceed 38% of their gross monthly income. This can help homeowners who are trapped in an ARM (Adjustable rate mortgage) due to the attractiveness of the low rates and the lack of long term thinking, or having no other choice due to credit rating, or financial situations, in order to purchase a home.

Right now is a great time to take advantage of this stimulus plan before the mortgage lenders become to flooded with applications as homeowners realize they can save hundreds every month. Although this will help millions of homeowners, refinancing may not be the right decision for everyone. Get in contact with a lender of your choice and get some quotes on the potential savings. Make sure you are patient and do some basic research on the mortgage rate national average, and the potential lenders. A home mortgage refinance can be beneficial if it is done the right way but if it is done wrong it can be a costly decision that may ultimately cost you your home.

-M Petrone

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