President Obama and the Government have enacted their $75 billion Home Mortgage Modification or Refinance stimulus plan. This plan, aimed at saving homeowners from foreclosure and further financial distress due to the tough economy, will allow a mortgage to be refinanced or modified into a fixed rate 4% home loan. Here are the details:

This housing bailout plan is referred to as the “Making Home Affordable” plan and allows an estimated 9 million homeowners the chance to obtain a fixed rate 4% mortgage through refinancing or loan modification. This is a much lower interest rate than homeowners currently have and the savings easily add up into the hundreds of dollars for the average homeowner.

Even if you have applied for a home mortgage refinance or modification and been rejected in the past, there is a much increased chance of you being approved now under the guidelines of this plan. Here are some of the main points of this plan which homeowners can take advantage of to save a lot of money every single month, or even more importantly, save their home from foreclosure:

-Homeowners who have lost their job, income, have high debts, or other financial problems will need to write a “Financial Hardship” letter stating the facts about their finances. Everything from debts, to income, need to be included in this letter. Also, be sure to hand sign the letter as well as hand write it.

-If you are a homeowner who has been able to keep up and pay your mortgage on time and in full for 12 consecutive months you will be able to refinance your home loan into a fixed rate 4% mortgage. If you have been late on a payment that is ok, however as long the payment was not over 30 days late you will be ok.

-If your home has lost its value as millions of home have due to the housing market troubles, you can now refinance or modify a mortgage even if you owe up to 5% more on the home than the mortgage has remaining on its balance.

-Home loans backed by either Freddie Mac or Fannie Mae will be eligible for automatic 4% home mortgage modification, regardless of the homeowners financial position.

-If a homeowner does indeed modify their home loan through Fannie Mae or Freddie Mac, their mortgage payment would not exceed 31% of their gross monthly income. Currently, a lot of homeowners pay 50% or even more of their gross income towards their monthly mortgage payment.

Homeowners who take advantage of this chance to obtain a 4% fixed rate home mortgage will save a lot of money, just through interest payments, on their home loan payment every month. The savings can easily add up to tens of thousands of dollars. At least look into the potential savings you can have by taking advantage of this home mortgage refinancing and modification program from the Government and President Obama.

-M Petrone

Subscribe via email

Enter your email address:

Delivered by FeedBurner