Homeowners should feel a little relief as President Barack Obamas “Home Affordability Plan” will save them hundreds per month. The housing market has recently been going through some hard times. Property values are dropping as homes are foreclosed on and mortgages get defaulted. Foreclosed homes reduce the value of other homes in the same neighborhood and complicates things even more. In response to these issues President Obama and his administration have introduced this mortgage stimulus plan. The plan which was enacted in March, will allow millions of homeowners the chance to refinance or modify their mortgage into a new one with better terms, rates and conditions. Today, many homeowners do not have the typical 20% equity stake in their home that is usually required to perform a refinance. However, this mortgage stimulus plan from Obama will make it easier than ever to refinance or modify a home loan and have a lower, easier to manage, monthly mortgage payment. The ultimate goals of this mortgage refinance stimulus plan is to help over 7 million struggling homeowners stay in their home and not have to face foreclosure or defaulting on their home loan. The government will be giving cash incentives to mortgage lenders and banks for approving mortgage modifications and refinancing. That means there is more incentive and less risk for a mortgage lender or bank to approved the refinance. The eligibility requirements for loan modification or refinancing are relaxed which allows more homeowners to be approved.

Now, homeowners taking advantage of this mortgage stimulus plan will almost definitely get their loan modified or refinanced within the guidelines set by Obama. Under this plan, the most a monthly home payment can be is 38% of the homeowners gross monthly income. Also, mortgage lenders and banks will receive additional cash incentives from the government, dollar for dollar, if the monthly mortgage payment can be lowered even more to 31% of the gross monthly income. This means homeowners who have lost their job, lost hours at work, or who have other debts and bills that need attention. Right now, typical homeowners are paying 40% - 50% of their gross monthly income towards their mortgage. A mortgage payment that is 20% lower would be a huge savings every month. As an example, if your current mortgage payment is $1200 per month, using this plan you should be able to get a mortgage around $960 per month with a savings of $240 per month for the life of the home loan.

Mortgage refinancing and modification
are amazing ways to take advantage of Obamas stimulus plan. Millions of homeowners are automatically eligible to receive the benefits of this package and refinance their home loan into a much more affordable rate. The qualifications for refinancing have been relaxed with this new stimulus package in place so even if you have been turned down before, try again. Refinancing a home mortgage the right way will save you a lot of money every month while doing nothing will cost you thousands and maybe your home.

-M Petrone

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