If you are among the millions of homeowners who have recently missed a home mortgage payment and now are facing defaulting on your loan or possibly a foreclosure, then the Government and President Obama have a plan to assist you. The “Making Home Affordable” plan now allows homeowners a chance to modify their mortgage and get a fixed rate 4% loan.

Here are some of the eligibility requirements and qualifications for taking advantage of this “Home Affordability Plan” from Obama:

-The home loan to be modified must be the primary residence of the homeowner. Investment and second properties are not covered under this housing bailout package.

-The home loan must have a remaining balance of less than $729,500. Also, this plan only covers primary loans. Second home loans must be dealt with seperately.

-This plan is for homeowners who have signed on and completed their mortgage on or before the date of January 1st, 2009.

-Any claimed income must be verifiable through pay stubs and tax returns. Banks and mortgage lenders are very strict about this, especially these days.

-A homeowner with a monthly debt of over 55% of their gross monthly income must agree to go to free credit counseling in order to take advantage of this plan.

-A handwritten and signed letter of your “Financial Hardships” must be submitted along with your home loan modification application.

Here are some options and different things that Banks and Mortgage Lenders can now offer using this $75 billion housing bailout program:

-Banks and mortgage lenders who approve home mortgage modifications must make sure the monthly mortgage payments are lower than or equal to 31% of the homeowners monthly gross income.

-Their are no closing costs or other fees associated with a home loan modification when using this Government stimulus plan. Fees and closing costs are paid trough Government cash incentives.

-In order to meet the 31% mortgage payment to income goal, a bank or lender may have to set up a balloon payment at the end of the loan. This needs to be paid off before the home is refinanced or sold.

-Interest rates can go as low as 2% but more realistically will be around 4% for the typical homeowner.

-Homeowners who use this plan and make their mortgage payments on time will be given a cash bonus from the Government, up to $1000 per year for 5 years for each year of on time mortgage payments.

-Their will be no additional chances to modify a home loan using this plan. There is no second chances with this Government mortgage bailout plan.

-After 5 years of the modified home mortgage have passed, the loans interest rates may be raised. This housing plan is meant to help homeowners regain their financial grounding and not designed for long term assistance.

A home loan modification may be just the thing needed to avoid foreclosure or loan default, Luckily, with this “Making Home Affordable” plan, a homeowner can now easily refinance their home loan and save a lot of money doing so. Take advantage now while this plan is in effect to see major savings every month and save your home.

-M Petrone

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