Recently, President Obama announced his “Mortgage Stimulus Refinance Plan” which allows millions of homeowners the chance to refinance at a 4.5% fixed rate. Hundreds of dollars can be saved for the average homeowner who takes advantage of this refinancing plan. Here is how this “Home Affordability Plan” works:

There are 2 main parts to this home mortgage bailout stimulus plan from President Obama:

1.Home Mortgage Refinancing
2.Home Loan Modification

Here is some more details about each of these plans:

-The Home Mortgage Stimulus Refinance Plan
Using this program, homeowners who have a mortgage backed or insured by either lending giant Freddie Mac or Fannie Mae are eligible for a mortgage refinance even if they owe more than their home is worth. This only requirement is that the mortgage be backed by one of the two lenders. Homeowners who are still managing to make their mortgage payments and have not felt the effects of this bad economy are still capable to take advantage of this plan. Another condition is that the home to be refinanced is the main residence of the homeowner. Obamas mortgage stimulus refinance plan does not cover second homes or investment properties.

-The Home Loan Modification Package
The government will give cash incentives to mortgage lenders and banks who approve home refinancing for homeowners. Interest rates can be reduced to as low as 2% to meet the programs requirements and millions of homeowners can avoid foreclosure. The length of the loan is usually increased in order to make up for the lower payments. Using the loan modification program homeowners mortgage payments may not exceed 31% of the homeowners gross monthly income.

Millions of homeowners can take advantage of this mortgage stimulus plan from Obama and save hundreds per month on their mortgage. This plan will help curb the rising number of foreclosures as well as restore confidence in the market. Take advantage and refinance your home mortgage now.

-M Petrone

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