President Obamas “Making Home Affordable” plan will help 9 million homeowners across the country. However, there are some eligibility requirements which must be met in order to take advantage of this plan.

This mortgage stimulus plan and other government homeowner assistance plans, are a way to deal directly with the hurting economy.

Features of President Obamas Home Loan Modification Plan
A home loan modification, unlike a refinancing, is not a new loan. Instead, it changes the terms, conditions, and other elements of your current home loan. The Government has set aside over $75 billion in funds for mortgage lenders and banks to participate in Obamas “Making Home Affordable” plan. Here are some of the incentives.

-Mortgage lenders and banks can receive up to $1500 for approving homeowners for a home loan modification.

-The Government will make up any of the difference in money a lender may lose using this plan. For instance, a homeowners new monthly mortgage payment can not exceed 31% of their gross monthly income, so if a loan is modified and the homeowner only pays 31% of their income, the Government will make up the losses.

-The homeowner will get as much as $1000 each year for 5 years just for staying current on their newly modified home loan.

-The total amount you can benefit from the Governments plan is up to $10,500 when everything is said and done.

General Qualifications for Homeowners using Obamas Loan Modification Plan
-The home loan must be financed or backed by either Fannie Mae or Freddie Mac.

-The home in question must be the owners main living residence.

-The mortgage must have been closed on before January 1st 2009.

-Have a remaining balance of less than $729,500.

-Financial hardships must be the cause of your mortgage problems. The hardships can be a increase in your home loan payments, loss of job, reduced income, or other financial problems. Homeowners must include a letter of “Financial Hardship” along with their application.

-Current mortgage payments must be higher than 38% of a homeowners gross monthly income.

Features of President Obamas Refinancing Program
Refinancing a home loan is just getting a new home loan with better rates, terms, and conditions. The best part of the refinancing plan is that the loan can exceed 80% of the homes actual value. Before this mortgage stimulus plan, a home loan would not be approved for refinancing if the loan would be for more than 80% of the homes value. Homes have dropped in value, and mortgage interest rates are low, so refinancing may be a good option.

General Qualifications for Homeowners using Obamas Refinancing Program
-The home must be lived in by the owner

-The mortgage must be financed, controlled and be a conforming loan from either Freddie Mac or Fannie Mae.

-The mortgage must be current and up to date. No payments in the past 12 months can be late over 30 days or missing altogether.

-Your current income is sufficient enough to support the new home loan.

-The current home loan is between 80%-105% of the homes current market value. Also known as a LTV ratio (Loan to Value).

Homes which will Not Qualify for Obamas “Making Home Affordable” plan.
Some single family homes will not qualify for either of the home loan options from Obama. These homes are:
-Investor owned, or not a residence of the mortgage holder.

-Second or vacation homes.

-Have an LTV (Loan to Value) ration of less than 80%

-The mortgage is not financed by either Freddie Mac or Fannie Mae.

Homeowners Should Still Seek Professional Help
A lot of homeowners will not qualify for either of Obamas plan. The guidelines are only minimums which must be meant and are vague. However, it is entirely possible to see even bigger benefits than I have mentioned.

Homeowners looking for a mortgage refinancing or modification should hurry. Mortgage lenders and banks will be flooded with applications from homeowners looking to save money, or their home from foreclosure.

Homeowners everywhere should look into the potential savings that can easily be had through mortgage modification or refinancing. Lower interest rates, better payment terms, and a different length of mortgage may be the answer you need to save your home. Take advantage now, and save yourself.

-M Petrone

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