Recently Obama announced his “Making Home Affordable” plan which will allow millions of homeowners the chance to refinance or modify their mortgage into a new 4.5% fixed rate loan. The Government has set aside 75 billion to help homeowners who are struggling with their monthly mortgage payments.

Here are some common questions being asked about Obamas mortgage stimulus plan.
Will I Qualify For Obamas Mortgage Rescue Plan?
I owe more than my home is worth, will I qualify?
If you have a mortgage backed or insured by Fannie Mae or Freddie Mac, which millions are, you will instantly qualify for a loan modification. Under this stimulus plan, you can also refinance your mortgage for as much as 105% of your homes worth. Ideally, the federal government wants rates to be a fixed 4% or so for everyone, even new home buyers. This helps many homeowners who have seen their property values drop in during this mortgage crisis. However, to qualify for these plans, homeowners must be current on their mortgage for the past 12 months. Also, borrowers looking to take advantage of the loan modification plan must sign an affidavit of financial hardship. This can mean anything from a loss of income, to loss of hours, to medical bills etc.

What if I have bad credit or have missed a few mortgage payments?
For the homeowners who are in this situation, the program will give incentives to your current mortgage lender to modify your home loan into a manageable amount every month. The rules are that the mortgage payment must be between 31% - 38% of the homeowners gross monthly income. Total monthly debts, including bills and taxes, must not exceed 55% of your total monthly gross income. This mortgage affordability plan only applies to first mortgages, and will not help you for a second mortgage.

This mortgage stimulus plan from President Obama is a great chance to take advantage of interest rates and refinance or modify your current home loan. Homeowners will save hundreds just by asking a mortgage lender, or bank for a quick quote. Refinance right and save hundreds monthly.
-M Petrone

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