Great news for homeowners as President Obama announced his housing stimulus plan called the “Home affordability” stimulus plan. This plan makes refinancing a mortgage into a low 4.5% fixed rate easier for over 6 million homeowners. This will equal hundreds in savings every month.

With so many people eager to take advantage of the huge savings that could be had, I have listed here 2 key points in Obamas housing stimulus plan.

-Assist homeowners who do not have the usual 20% equity in their home required to refinance. The plan calls for incentives for mortgage lenders and banks who approve borrowers who would have been previously declined for a refinance due to not having enough equity in the home. This also helps a lot of homeowners who have seen their property values drop as the housing problems set in across the country.

-Allow easy and financially beneficial home mortgage modifications for homeowners who have mortgage backed by Freddie Mae or Freddie Mac. Most mortgages in the country are ultimately backed by one of these two giants, regardless of who your lender or bank is. They would call for a limit on the allowable monthly mortgage payment based on the borrowers monthly income. The payment can not exceed 38% of the borrowers gross monthly income.

Overall this plan will help a lot of homeowners who are struggling to make their financial ends meet every month. Also, with the rising unemployment rate and loss of hours, as well as market troubles, this stimulus plan could not come at a better time. While refinancing a home mortgage is not the best decision for everyone, millions of current homeowners can save a lot of money every single month on their home payments if they refinance the right way. Make sure you practice patience and do some simple research on potential mortgage lenders using the internet. Also, become familiar with the terminology used and the average rates and loan types across the country as well as in your area. Refinance the right way now and start saving money.

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