Millions of homeowners have become eligible to refinance their home into a new fixed rate 2% mortgage. President Obamas mortgage refinancing and modification stimulus plan makes this possible with over $75 billion in funds to help struggling homeowners. Homeowners can easily save hundreds every month, here is how it works:

Mortgage lenders and banks are going to be given cash incentives from the Government in order to cover any potential losses they may incur by approving “at risk” homeowners. This means that being approved for a home mortgage modification or refinance is now easier than ever. Things that were typically needed before, such as either 20% equity in your home or the cash equivalent, are no longer needed. More homeowners than ever before will be approved to modify or refinance their mortgage. When homeowners stay in their home, and do not have to foreclose, everybody is better off. Banks and mortgage lenders would rather not foreclose on your home and deal with the hassles associated with that. It is much easier, and more beneficial for them, to work with homeowners in an attempt to keep them in their house.

A lot of homeowners are also facing some type of “Financial Hardship” and their home could be the next casualty of their financial problems. With this in mind, President Obamas stimulus package allows homeowners in financial hardships to refinance their home mortgage into a more affordable 2% fixed rate home loan. This will mean a much more affordable monthly payment, and the odds that the homeowner will be able to keep their house dramatically improve for homeowners who take advantage.

All homeowners who have a mortgage backed, insured, or financed by either Fannie Mae or Freddie Mac are automatically eligible to modify their home loan. This can be done regardless of the personal financial situation of the homeowner. With this plan, a homeowner will not have to pay more than 31% of their monthly gross income. Many homeowners pay 50% or even 60% of their monthly income to their current mortgage payment.

Overall, this plan is going to help stabilize the housing market, and allow millions of homeowners huge savings every single month on interest payments. This plan will also prevent millions of homeowners from going into foreclosure, which is bad for everyone involved. This will hopefully bring some consumer confidence back into the housing market and home values will start to rise again. Use this plan while you still can and start seeing big savings every single month.

-M Petrone

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