President Obama, and most everyone, are well aware of the economic difficulties this country is facing and the millions of homeowners who are struggling to make ends meet. Housing and property values have plummeted and the growing number of foreclosures only worsens things. Many homeowners who purchased their home just a few years ago have seen their property values drop substantially leaving them owing more than their home is worth. To address these problems, President Barack Obama and his economic advisors have launched his housing stimulus plan which will help homeowners refinance or modify their current loans into more affordable options. This plan will make it easier for homeowners to refinance who do not have the usual 20% equity in their home lenders require. Also helped are millions of homeowners who have their mortgages backed by Freddie Mac or Fannie Mae. If your property value has dropped more than 15% you are also eligible to take advantage of this stimulus plan. This plan will help over 6 million homeowners stay in their homes and refinance into a better home loan. This is also done in part by giving incentives to lenders or banks who refinance “riskier” customers, in the form of low interest loans to banks or mortgage lenders.

Under this plan, the most the allowable monthly mortgage payment can be must not exceed 38% of the homeowners total gross monthly income. Banks or mortgage lenders will also get a near dollars for dollar payment incentive from the government if they lower the monthly payments further to 31% of the homeowners gross monthly income. This is great news for a lot of homeowners who are currently out of work, have seen their income reduced, or just struggling to make ends meet every month. A large number of homeowners currently pay 40% or up to 50% of their monthly income towards their mortgage payment. A 20% reduction in that payment would add up to a whole lot of money to be used towards something else every month.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner